MkLotusHousebyMichelleKaufmanDesigns,2007

INDUSTRYANALYSIS:PREFABRICATEDMODULARHOUSING

StevePuma,FinalProject,SUS6200

MacroeconomicsandEcologicalEconomics,Fall,2007

November14,2007

TABLEOFCONTENTS

Overview .........................................................................................................................................................3

Background .................................................................................................................................................3

IndustryAnalysis .............................................................................................................................................4

MarketTrends ............................................................................................................................................5

OpportunitiesandThreats .........................................................................................................................6

Products ......................................................................................................................................................8

IndustryConcentrationandAnalysis .......................................................................................................10

PricingandCompetition ...........................................................................................................................10

BarrierstoEntry .......................................................................................................................................12

CostofProduction ....................................................................................................................................13

MarketAnalysis.............................................................................................................................................14

MarketSize ...............................................................................................................................................14

MarketDemand .......................................................................................................................................15

Sustainabilityissues ......................................................................................................................................16

Conclusion:IndustryOutlook........................................................................................................................18

WorksCited...................................................................................................................................................19

2

OVERVIEW

BACKGROUND

MostAmericansdreamofowningtheirownhome.However,thecostofbuying

ahomehasincreasedsignificantlydimmingthehopeforsomepeople.More

importantly,thecostofbuildinganewhomehasbecometrulyadreamformost

people.Intheearly1990’s,tocombattherisingcostofowningahome,pre‐fabricated

homesincreasedinpopularity.Apre‐fabricatedhome,ormostcommonlyknownasa

‘modular’home,isbuiltinafactoryandshippedinpiecestotheowner’shomesite.

Thetimeandcostinvolvedinbuildinganderectingamodularhomeisconsiderablyless

thanconventionalconstruction.Thispaperwilllookatwhytherehasbeensuchan

increaseinpopularityofthemodularhome,andwhatthefutureentailsforthis

business.

Intheearly1900s,Sears,Roebuck&Co.beganmarketingmodularhomes

entitled‘HousebyMail’.Thesehomeswereprefabricateddwellingsthatgavehopeto

Americanswhodreamedofowningtheirownhome.Currently,thereareapproximately

120manufacturersintheUnitedStates.Someofthesecompaniesarefullyintegrated,

meaning,theyhavetheirownsales/marketingstaff,woodlots,sawmills,plywood,and

constructionplants.Withtheimprovementsinconstructiontechnology,today’s

modularhomesaresignificantlydifferentthantheSearsmodularhomes.The

differenceisduetotoday’ssophisticatedengineeringtoolsandmachineryusedtobuild

thehomes.

ThemodularhomeindustryisheavilyconcentratedintheEastCoastofNorth

America,wheretheabilitytoconstructhomesindoors,whereworkersandmaterials

arenotaffectedbysevereweather.Thishastheadvantagesofcostsavingsand

extendingthemanufacturingwindowtotheentireyear(inadditiontothesustainability

advantageofbetterworkingconditions).Thereisamajoropportunityforgrowthinthe

Westernregion,sinceonly8ofthemajormanufacturersarecurrentlylocatedWestof

theMississippi.

3

ThePrefabricatedModularHomeindustryiscurrentlyexperiencingalarge

amountofgrowthduetocostfactorsandrenewedinterestintheenvironmentand

globalclimatechange.This“environmentalfactor”ispoisedtobecomethenew

industrystandard,asmanyfacetsofmodularbuildinglendthemselveseasilytoefficient

buildingpracticesandgreentechnologies.

INDUSTRYANALYSIS

Prefabricatedormodularhomesareconstructedusingthree‐dimensionalboxes

or"modules"thatare90percentto95percentcompletewhentheycomeoffthe

assemblyline.Thisincludesinteriorwallsandfinishwork,andexteriorsiding.Also

utilityworkandconduitlinesaswellasandinteriorwallsandstairsarecomplete.Apre

fabricatedormodularhomeisusuallyshippedintwoorthreesections.Itarrivesona

buildingsitejustneedingtobesetandattachedtothefoundation.Severalmodulescan

beconnectedside‐by‐sideorstackedtocreateafinishedhome.Whencompleted,most

modularhomesarecomposedofgroupsoftwo,three,orfourmodules(boxes)

fastenedtogether.Mostmodularmanufacturersdesigntheirhomeswithintegralroofs

thatarehingedsotheywilllieflatduringshipment.Forsteeplypitchedroofs,anextra

roofunitissometimesrequired.Forroofswithmultipleconfigurations,some

manufacturersprovideindividualrooftrussesthatmustbeinstalledandsheathedat

thesitetofinishthestructure.Thisincreaseserectiontimeandprojectcostbut

providesincreaseddesignflexibility.Modularhomesareconstructedtominimizethe

crackingofgypsumboardsheathingduringshipment.Mostmodularmanufacturers

constructeachboxwithfloorandceilingjoists,evenwhenboxeswillbestacked

vertically.(MSUP1875factorybuilthousing,2007)

Thereareapproximately120differentmodularhomemanufacturersacross

NorthAmerica,withalargerconcentrationofthemlocatedalongtheeastcoast.With

therisingcostsofbuildingstick‐builthomes,themomentumforprefabricatedhomesis

gaining.However,withtherisingcostsofmaterialsandneedforeducationonthepart

ofthefinancialindustryandthepublic,theindustrymaynotbeasgoodadealfor

4

peopledreamingofowningahome.Regardless,themodularhomeindustryisgrowing

largerandmeetstheneedsofdifferentpopulations,fromfirsthomestovacation

homes.

MARKETTRENDS

Rangingfromapproximately$100‐$300asquarefoot,modularhomesare

becomingincreasinglypopular.Additionally,thetrendismovingtowards‘greenbuilt’

homes.Greenbuilthomesarehomesbuiltwithenvironmentallyfriendlymaterials.

David,Newey,directorofclientservicesforSoutheastregionofEmpyreanstates:“As

housingcostsriseandaspeoplebecomemuchmorefocusedonmaterialsandqualityof

constructionandqualityofperformanceofthehouse...themarketwilldemandthis

typeofconstructionanddemandthathousesperformbetter”(TriangleBusiness

Journal,2007).Inorderforthemodularhomeindustrytotruly‘takeoff’,educationof

howthehomesaremanufacturedisnecessarytoensurethatthepublicdoesnot

confusemodularhomeswithmobilehomes.ThereisacertainstigmaintheUnited

Statesregarding“mobilehomes”or“pre‐manufactured”homes.Thestigmakeeps

peoplefromotherwiseconsideringthisveryaffordableandefficientwaytogetahome

built.

Anotherimportantfactoraffectingthemodularhomemarketisthelaborforce

intheUnitedStatesandCanada.Inmanyareas,theskilledlaborforcenecessaryto

buildcustom“stickbuilt”homesisn’tavailableduetoaverytightlabormarketso

homebuilderschargeapremiumandestablishwaitinglistsforclientswhowouldlikea

homebuilt.Prebuiltmodularhomesrequirelittleskilledlaborandcomeneedingvery

littledonetobeafullyfunctioningdomicile.Withanordertomoveindateof8weeks

modularhomesarequickertomoveintomostcasesthanconventionalhome.With

modularhomescostinglessthantheirstickbuiltcounterparts,theyofferavery

attractiveoptionforallhomebuyers,notjustthefirsttimebuyer.

5

Ifthemodularhomeindustryisabletogainmomentuminthegreaterhousing

marketwiththeadvantagestheypossess,thereisconsiderableroomforthemto

increasetheirmarketshare.AccordingtoWIREDMagazinein2007,“AVIFRIEDMAN,

ANARCHITECTUREPROFESSORATMCGILLUNIVERSITY,ESTIMATESTHAT5TO10

PERCENTOFALLNEWHOMESINNORTHAMERICAAREPREFAB(ANDABOUT10

PERCENTOFTHATMARKETISUPSCALE).HEPREDICTSTHEPREFABFIGUREWILLJUMP

TOMORETHAN35PERCENTINTHENEXT10YEARS.“

OPPORTUNITIESANDTHREATS

Thereareseveralopportunitieswithprefabricatedhomes.First,theproduction

costsareconsiderablylower.Notonlydocompaniesmanufacturingprefabricated

homesgaineconomiesofscaleintheproductioncosts,otheroverheadcostsarealso

sharedallowingthepricepersquarefoottostaydown.Additionally,piecesofthe

homeareproducedinanenvironmentwheretheclimate‐controlensurestheworkforce

isabletocompletetheworkwiththehighestquality,unlikeatraditionalbuilderwhere

thematerialssitintheelementsoftheweatheratthebuildingsite.Engineering

tolerancesforproductsarefiner,andtheconstructionqualitybetter,duetomachinery

withinthemanufacturingenvironmentusingastablewell‐trainedworkforceversusa

differentsubcontractoroneachjob.Thereisalsolesswasteofmaterialsduring

production,asthereistimeanddataforqualityimprovementefforts,suchasasix

sigmainitiative,whichaidsinloweringthecostofproduction.

Second,prefabricatedhomesareeligiblefortraditionalmortgagefinancing.20

yearsagoandevenasrecentasjust10yearsago,amobilehometraileror

manufacturedhomehadalowermortgagetermandclassifieddifferentlythana

traditionalhome.Today,prefabricatedhomesarebuiltonfoundationsandareofa

leastthesamequalityofconstructionassite‐builthomesareandthereforequalifyfor

30‐yearmortgageloansmakingthemextremelyaffordable.

6

Third,materialsusedareusuallyhigher‐gradematerials,focusingongreenbuilt

technologies.Withtheabilitytomachinebuildingmaterialsinmanufacturingfacilities,

companiesareabletobuildhomesofbetterqualitythancanbebuilton‐site.

Additionally,workersarenotexposedtotheelements,areaffordedgoodbenefitsand

workingconditions,andgiventrainingandaccesstothelatesttechnological

constructiontechniquesandtools.

Fourth,modularhomeconstructionundergoessimilarpermitandbuildingcode

inspections,asdoesitstraditionalstick‐builtcounterpart.Withthequalityimproved

andthemajorityofthehomeprebuilt,theonsiteinspectionrequiredisminimal.

Modularhomesmustconformtothesamestateandlocalbuildingcodesasdoother

residences.TheBuildingOfficialsandCodeAdministratorsNationalBuildingCodeisthe

mostcommonlyenforcedofthenationalcodes.Inmostcases,amulti‐stepprocess

happensforeachhousebeingmanufactured.Plansaresubmittedtolocalauthorities

forbuilding‐codeapproval.Thenbuildinginspectorsmustapprovethemanufacturing

processandtheconstructionoftheactualunitsbeforecertificationisgranted.Thisis

sometimesknownasa“third‐partyplancheck”(Cornelius,PumaandSowers,2007).

Uponthegrantingofcertificationforamodelofahome,astate‐approvedlabelis

affixedtoeachunit.

Athreatthatexists,istheconfusionthattheseareexpensive“mobilehomes”.

Educationtothepublicaboutwhatmodularhomesare,andthedifferencesin

construction,mustoccur.Anotherthreatisthatthefinancialindustrymaynothave

experienceindrawinguploansforprefabricatedhomes,thusmakingobtaining

financingharderforindividuals.StuartTyrie,avicepresidentofWellsFargoHome

Mortgage,recommends“anyonethinkingofbuyinganontraditionalhouseshould

spendtimespeakingwithprospectivelenderstomakesuretheyhaveexperience

makingloansonthistypeofhome.”(NewYorkTimes,2006).Anotherthreatisthere

maynotbeacostsavingsasinitiallythought.Forinstance,notonlydoesthebuyer

7

havetoobtainfinancingforthemodularhome,butthebuyerwillalsohavetopayfor

theland,taxesandpermitsrequired.

PRODUCTS

Modularhomesmustbebuiltstrongenoughtowithstandthetransportationto

theconstructionsite.Subsequently,thereisafloorandceilingbuiltevenifitisatwo‐

storyhome,alongwiththickerwallsthanastandardsupportingwall.StalwartBuilt

Homes,locatedinFlorida,buildLEED‐certifiedhomesthatwithstand200‐mileanhour

windsgeneratedfromhurricanes.1

ConnorBuildingCompany,locatedinVermont,builds“panelized”homes,similar

tomodularbutrequiringmoreassemblyatthehomesite.Forinstance,portionsofthe

panelizedhomearebuiltatthefactory,thestructuralandpartitionwalls,asarethe

rafters,yet,unlikemodular,areassembledatthehomesite.(Cornelius,Pumaand

Sowers)

Oneofthebenefitsofamodularorprefabricatedhomeisthatthereisless

wasteofmaterials.“RebeccaWoelke,directorofmediarelationsforMichelle

KaufmannDesigns(MKD)inOakland,California,toldEBNthecompany’smodular

homesyieldupto70%lesswastethantypicalsite‐builthomes.”(ENN,2007)Also

noteworthyisthefactthattheprefabricatedhousingindustryhasadoptedlean

manufacturingprinciplesintheirproduction,whichisdesignedtoeliminatewasteor

overstockingofmaterials,whichcostsmoneytositinstorage.

1LEEDcertificationactuallyisdependentonthebuildingsiteitself,aswellastheorientationofthehouseonthatsite,sothiscompanymaybemisrepresentingthefactssomewhat.

8

Takenfromthe2002USCensusBureauforPrefabricatedWoodBuildingManufacturing,belowisatablethatoutlinestheindustrystatisticsbyprimaryproductclass.

9

INDUSTRYCONCENTRATIONANDANALYSIS

Thetablebelowistakenfromthe2002EconomicCensusforPrefabricated

WoodBuildingManufacturingbytheUSCensusBureau.Theinformationprovided

describestheemployees,costofmaterialsandvalueofshipments.

Prefabricationhomesaregenerallyoperatedregionallybasedontransportation

costs.

PRICINGANDCOMPETITION

Buyingorbuildingamodernhomeisexpensive.Amodularhomeisawell‐

designedhome,butthecostscanstillbesubstantial.Whilemodularhomesare

generallylessexpensiveasthanotheralternatives,therearecompanieswhospecialize

inhighquality,highcostprebuilthomes.Mosttimestheprefabricatedhomecanbe

classifiedasnewconstruction,whichbuyersmayfindfinancingdifficulttoobtain.

10

Generallyinanewconstructionloantheinterestishigheruntilthehomeiscompleted

atwhichtimetheloanconvertstoconventionalhomefinancing.Giventheexpanseof

modularmanufacturerswithaclearlydefinedmarketmanyviewthisasaperfect

competition.Themanufacturersdonotcontrolthecostsforeveryone.Rather,the

fluctuationofcostsofmaterialswouldeventuallydictatethepricestructuresforthe

modularhomesbutmanufacturingtechniqueandeconomiesofscalecouldstillhelpto

keepcostsunderthoseofconventionalstickbuilthomes.

Belowisanexampleofestimatedcostsforaprefabricatedhome/buildingsite.

Thesecostsvarydependingontheareawherethefinalproductwillbeerected.

“Costs‐ABasicBudgetOutline Costs‐Example1500sqfthome

1.Home/Structure 1. $227,000

i.designfees i.$4,000

ii.materials/structure ii.$210,000($140sqftx1500)

iii.upgrades/finishes iii.$10,000

iv.transportation iv.$3,000

2.Land/Site 2.$148,000

i.lot i.$120,000

ii.sitework/foundation/hookup ii.$18,000

iii.landscaping iii.$10,000

3.Financing/Taxes/Permits 3.$19,000

i.loancosts/closingcosts i.$4,000

ii.salestax/buildingpermits/fees ii.$15,000

Total=$394,000(exampleonly‐costvary)”

(Prefabs.com,2006)

11

InCanada,EmpireModularHomesisAlberta’sleadingmanufacturerformodular

homes.“EmpireModularHomesisproudtoprovidemodern,attractive,andhigh

qualitymanufacturedhomes.Ourmodularhomesdisplayexcellentcraftsmanshipand

featurethelatestinnovationsinmanufacturedhomedesignandconstruction.”

(NetventionCompanyProfiles,2007).

Bensonwood,anothermanufacturer,providesgreenbuilthomes,whichoffer

environmentalbenefits,suchas“better‐insulatedstructures;lesswastefrom

construction;reducedtransportationimpacts;and,insomecases,easierdisassembly

forreuse.Prefabricatedconstructionalsohasthepotential,giventheefficiencyof

factoryproduction,todeliverthesebenefitsatalowercostthansite‐builthousing.”

(ENN,2007)

Ahigher‐endbuilderofmodularhomes,locatedinStamford,Connecticut,builds

homeof5,000squarefeetandlarger,cateringtocustomerswhodesirecustomized

details.DarrellHoss,thebuilder,chosetobuildmodularhomesversusstick‐built

homesbecausethebuildingmaterialsarekeptinaclimatecontrolledareaandthe

overallqualityofconstructionismoredurablethanstick‐builthomes.Additionally,the

employeesarelong‐termemployeesversushiredlaborersforstick‐builthomes.

BARRIERSTOENTRY

Themodularorprefabricatedhomebuildingindustryhasseveralbarriersthat

makeentryintothehousingmarketdifficult.Publicopinionisthenumberoneissue

thatthattheindustryfaces.Peoplecontinuetoviewhomesthatarepre‐builtasbeing

madeoflesserqualitycomponentsandbylessskilledlabor.Overcomingthischallenge

willrequiretheindustrytoworktogetherasawholewithacomprehensivemarketing

andpublicrelationscampaigntochangethepublic’sopinion.

Competitionremainshighwithhighlycompetitivelarge‐scaleon‐sitehome

builderswhouseeconomiesofscaletoreducethecostsofland,materials,andlabor.

SomeofthesemegabuildersareevenNewYorkStockExchangetradedfirmsthatcan

12

investintheinfrastructuretomeetbuyerneeds.However,onapositivenote,public

opinionshowstherearehundredsofthousandsofpeoplewhodonotwanttoliveina

PlannedCommunityandarelookingtobuildonrawland.

XtremeHomes,whichisa2‐year‐oldcompanylocatedinOroville,California,has

beenabletolessenitsbarrierstoentrybychoosingitslocationwisely.XtremeHomes

intendstotakeadvantageofthepreviously‐mentionedlargemarketopportunitythat

existsontheWestcoast,aswellastheincreasinginterestinenvironmentally‐friendly

technologies.XtremeHomes’CEO,TimSchmidt,hadpreviouslybeenworkinginFlorida,

andsawamarketnichehecouldtakeadvantageof.(Schmidt)

Stateandfederalregulationsalsohavetobefollowedcarefullyandmanystates

haveextremelystringentbuildingstandards.Ifareasbecometoobuiltup,the

regulatingmunicipalitywillbegintotightentheamountofpermitsissued,andtherewill

beintensecompetitionforthelimitedamountofpermitsthatareissued.

Timetomarketisanotherareathatcanbedifficultfortheprefabricatedor

modularhomeissuetohandle.Althoughitispossibleformanyofthecompaniesto

deliverahomereadytomoveintowithineightweeksthistightturnaroundtimeisnot

alwayspossible.Ifbuyerswantcustomfeaturesoradaptations,themanufacturing

processisslowed.Permittingmustberedoneoramended,andthewholeprocessis

sloweddown.Additionally,whendemandishigh,thehomessimplycannotbebuiltfast

enough.Ifthedemandbecomessohighthatfactoriesconsiderexpansion,themajority

ofcompanieswouldtakemorethantwoyearsandmillionsofdollarstobuildaplant

largeenoughrequiredtoproducemodularhomes.

COSTOFPRODUCTION

Themodularmanufacturershavegeneralspecificationsthathavecosts

associatedwiththem.Ifahomebuyerwantstoupgradeorvaryinanyway,thecost

rises.Thisismuchthesameasaregularstick‐builthome.“Ifyou’retryingtodo

sustainability,”Qualesaidofaffordablehousing,“you’regoingtobeusingmaterialsthat

13

arethesameas,ifnotbetterthan,thoseusedinamarket‐ratehome,soyouneed

otherstrategies.”(ENN,2007)Thecostcomparisonofastick‐builthomeversusa

modularisthefactthatwithamodularhome,everythingisbuilton‐siteandthen

shippedtothehomesite.Withstick‐builthomes,contractorsandlaborershaveto

traveltothesiteandmaterialsaredeliveredinseveralsmallbatches.Withamodular,

theshipmentmaytakeacoupleoftrucksandacranewithafewlaborerstoputthe

piecestogether,reducingcosts.”Itremainsvital,however,thatthegeneralcontractor

performingtheonsiteworkbefamiliarwithmodularconstructionandtheprocedurefor

ensuringagoodsealbetweenmodules.”(ENN,2007)

MARKETANALYSIS

Themodularhomemanufacturermarketislocatedacrossthecountry,with

mostoftheconcentrationofmanufacturersontheeastcoast.Thedemandforhigher‐

quality,lower‐costhomesisincreasing.Boththechangingattitudesandevolvingnature

ofhomebuildersandhomebuyerswillhaveamajorimpactontheindustry’sprospects.

MARKETSIZE

Thetop10manufacturershaveeachbuiltaminimumof500homesin2006and

haveacombinedrevenueof4billiondollarswiththetopcompanyapproaching5,000

homesbuiltandshippedinoneyear.Thetop10Company’sresultsinhomesshipped

andgrossrevenuefor2006arelistedbelow.

2006GrossRevenue

“Company 2006HomesShipped (inmillions)

1. ChampionEnterprises 4,653 $1,365

2. CMHManufacturing 3,166 $1,328

3. PalmHarborHomes 1,614 $711

4. MuncyHomes 1,346 $85

5. ExcelHomes 1,200 $111

14

6. Ritz‐CraftCorporation 849 $91

7. ProfessionalBuildingSystems 781 $58

8. RoyalConcreteConcepts 600 $68

9. LibertyHomes 552 $97

10. PleasantStreetHomes 526 $57”

(Top31Modular/Whole‐HousePanelBuilders,2006)

Asthemarketcontinuestogrow,whichclearlytheabove‐citedcompaniesare

provingtobetrue,newhomescanbewithinreachofalmosteveryoneinAmerica

allowingthemtheopportunitytoaffordtheAmericandream.

MARKETDEMAND

Modularhomeshaveincreasedinpopularity,particularlyinthenortheast.

Martha’sVineyardisagoodexampleofhowthemarketisincreasing.''Atleasta

quarterofallthenewhousesontheVineyardinthelastyeararemodular,nodoubt,"

saidTisburybuildinginspectorKennethBarwick.''Andthattrendwilllikelygohigheras

timegoeson."(BostonGlobe,2006)

Currentlythetrendofallnewhomesbuiltisapproximately2percentofthe

marketbeingmodularhomes.AccordingtoFredHallahan,principalofHallahan

Associates,whichisafirmthatcompilesindustrystatisticsintheBaltimorearea,

believesthatthetrendwillincreasetoseventoeightpercentbytheendofthedecade.

Belowisagraphshowingtheincreaseinmodularproductionfrom1995‐2005:

15

TheriseinmodularbuilthomesinMartha’sVineyard,knownforsprawling

estates,is“simplearithmetic:thefewertimeslocaltradesmenbangahammer,themorebucksthe

homeownersaves.Charter'srule‐of‐thumbcostforabudget‐consciousmodularhomeofexcellent

qualityis$115persquarefoot,whichgetsthebuyeraplaceinmove‐incondition.Acustomhome,

meanwhile,startsataround$200persquarefootforthemostentry‐levelhomeontheVineyard.”

(BostonGlobe,2006)

SUSTAINABILITYISSUES

Aspreviouslymentioned,theprefabricatedmodularhomebuildingindustryisaperfectmatchforsustainabilityissues.Therearemanypossibleadvantagessuchasthefollowing:

16

• Efficientuseofrawmaterials:smallpiecesofwoodandothermaterialscanbeusewherepossible,unlikethetypicalbuildingindustrypracticeofdiscardingthem.

• Abilitytostandardizecomponentsmeanshigherquality,moreefficiency

• Thepossibilityexistsforco‐locationwithothersustainablebusinesses,suchaspowerco‐generationandrecyclingfacilities.

• Betterworkingconditionsforconstructionemployees:

o Stableyear‐roundemploymentmeansmorework

o Longeremploymentmeansbettertrainedworkers,whichleadestohigherquality.

o Betterbenefits

o Workersdonothavetobeadverselyaffectedbyweatherconditions.

• Housescanbeconstructedwithenvironmentally‐friendlytechnologies,suchas:

o “SIPS”panels,whicharesolidwallpanels,constructedbysandwiching2piecesofplywoodaroundaninsulatedcore,andareveryenergyefficient.

o Greenroofs

o Energy‐starcertifiedappliances

o Specially‐designedpassiveheatingandcoolingsystems

o Betterqualitymeansbettersealsbetweenpanelsandsections.

Giventhepreviouslymentionedgrowth,theabilitytotakeadvantageofthesegreentechnologiesmeansthatprefabricatedmodularhousingcanhaveahugeimpactontheenvironmentandclimatechangeissues,sincestructuresaccountforalargepercentageofenergyusageandgreenhousegasemissions.

17

CONCLUSION:INDUSTRYOUTLOOK

Althoughprefabricatedhomeconstructionhasmadegreatstridesinthehome

manufacturingmarket,particularlyindesign,constructionandenergyefficiency,there

isstillalotofroomforgrowth,especiallyontheWestCoastoftheUnitesStates.Even

thoughsomeofthemanufacturersarebuildingagreenproduct,itisnotsomethingthat

allthemanufacturershaveyetmastered.Specifically,whenitisnecessarytochange

thespecsofahome,suchastoaddextrainsulationtomakeitmoreenvironmentally

friendly,theremaybemoreexpensiveinthelongrun.Thismaypossiblybemitigatedby

takingadvantageofeconomiesofscale,astheautoandotherlargeindustrieshave

done.Theremayalsobesitelimitationsorareaswhicharenotfamiliarwiththebuilding

process.Inessence,theprefabricatedmodularhomebuildingindustryisnotyetthe

standardwaytobuildhomes,especiallygreenhomes,buttheindustryiscurrently

positionedsothatitwillnotbelongbeforebothofthesethingsaretheindustry

standard.(McGraw‐HillConstruction)

18

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