The subprime mortgage crisis has affected just about every form of housing within the country. Lending is more restrictive, current home inventories are still tremendous, and a large percentage is unable to make their current mortgage payments. And while the modular home industry has felt the effects, the impact has been much less than on the site-built housing industry.
Recent trends at the end of 2008 and thus far in 2009 has seen new customers considering modular homes in greater numbers. The largest group is those that normally spend $200,000 for a home but are looking to maximize their value while keeping the price within their budget. Modular homes boast greater value through better durability, larger square footage and more amenities compared to most equally-priced site-built homes. Given the continued pricing instability of new and existing homes, modular homes give a more stable value.
Fortunately, lending practices for many banks have now loosened enabling easier financing for modular homes that had met resistances previously. This will likely continue for both new and existing modular homes as incentives to banks to make these loans become more accessible to the homebuyer. Because some people are selling their existing homes out of necessity, getting into a new home at a lower price is their eventual goal. For the same amount of money, modular homes offer more than traditional site-built structures.
In addition to modular homes offering a better value solution, modular home manufacturers and retailers are expanding their markets. By being more creative, those in the modular home industry have found new customers who benefit from this technology. For example, some retailers have been supplying individual units to ski resorts for condo-type additions as the ski resorts see a need. This makes it simple for the ski lodge to increase their capacity without taking on a huge expense.
Commercial uses of modular homes for schools and government buildings has been present for decades, but other areas in commercial construction are just now beginning to explore modular construction for its use. Compared to residential housing, the commercial market has been less affected in the current housing crisis. This is an ideal area for the modular industry to explore in greater numbers.
While global economic effects are present, some international markets have not been hit as hard as the U.S. Canada represents one such market. Many modular retailers and manufacturers, especially in the northeast, have expanded their territories to include locations across the U.S. border. Despite the currency exchange difference, this has been a profitable endeavor for several.
While modular homes offer better technologies and greener living compared to site-built homes, their greater value and their flexibility in use is what is proving to allow a strong competitive edge. While 2009 is certain to be a less than banner year for most businesses, the modular home industry features a good foundation to weather the storm. When the dust settles, modular homes have the best value and opportunity to gain momentum moving into the future.