State Of The High-Design Manufactured Homes Industry
Today, the high-design manufactured homes industry boasts of close to 200 firms whose sales on an annual basis (combined) is estimated to be 3 billion US dollars. The main players in the high-design manufactured home industry are Palm Harbor Homes, Clayton Homes, Champion enterprises and last but not least Cavco. In this text, I discuss the high-design manufactured homes industry and the prospects for growth over the next 15 years.
A discussion
The need for housing that is affordable and of high quality has never been greater. This demand has largely been informed by the adverse effects of the global economic crunch that has been billed as one of the worst since the 1920s downturn in economic activity. Indeed, industry analysts observe that going forward, in the next two decades years or so, people will be more inclined towards purchasing manufactured homes as opposed to building conventional site-built homes.
This is based on the projection that in the modern day, conventional site-built homes are more expensive by up to 10% to 30% as compared to manufactured homes. These projections are based on per square foot measurement. It hence follows that that though the house affordability gap is said to be ever widening, more and more people can now own homes as a result of the significant savings presented by manufactured homes.According to Hassell (2003) the high-design manufactured home segment has over time enhanced its efficiencies in a bid to ensure that its products are more affordable.
It is important to note that the segment has managed to achieve the efficiencies as a result of improved processes in the factory-building process. In this regard, high quality and low costs are maintained as a result of the enhanced effectiveness when it comes to the coordination as well as management of employees working in the factory. This is in sharp contrast to what is the case when it comes to conventional site-built homes where contracted labor may fail to deliver as a result of a constellation of factors including but not in any way limited to unskilled labor, poor weather on-site as well as vandalism to building materials.
Further, given the improvement in the means as well as methods of production, Hassell (2003) is of the opinion that the high-design manufactured homes are here to stay and hence going forward, the segment is expected to experience unprecedented growth.Further, according to Hassell (2003), one other factor that may work in favor of the high design manufactured home segment for the coming years includes the benefits the segment derives from economies of scale.
The argument in this case is based on the fact that due to the tendency of purchasing appliances, products as well as other materials in large quantities; high-design manufactured homes reap from economies of scale just like is the case with other operations involving assembly-line. Hence unlike conventional site-built homes, manufactured home builders can be able to attract substantial savings on a number of components and hence in that regard, the ultimate buyer of the manufactured home benefits as these savings are ultimately passed on to him or her.
This is one of the main factors that will make the high-design manufactured homes segment experience growth in the next two decades or so as customers of the same have a clear opportunity to make savings and hence reduce costs associated with purchasing a conventional site-built home.It is also equally important to note that the high-design manufactured homes have in the recent past witnessed a significant change in the range of exterior finishes as well as architectural styles so as to suit the various needs as well as tastes of the marketplace.
Further, due to the advances in technology, high-design manufactured homes are increasingly being designed to blend in into the neighborhood and factory innovation is expected to even go further ahead to avail to urban as well as suburban dwellers housing options that are real.Another prospect which is expected to drive the demand as well as guide prospects for high-design manufactured homes in the next 15 years is the need for energy efficiency.
Already, home owners are showing an increased affinity towards homes that are energy efficient in terms of enhanced insulation levels etc so as to lower the energy costs that have in the recent past been on a rising streak. It therefore follows that with the ability of high-design manufactured homes to enhance energy efficiency in their designs; more and more buyers will seek to make significant savings as far as operating a home is concerned by turning their attention to EnergyStar-labeled high-design manufactured homes.
As a projection of the expected overall market performance of high-design manufactured homes; it may be prudent o look at the performance of this segment over the last few years. It is important to note that beginning the year 2002; the segment has recorded unprecedented growth each year with the Bureau of the Census giving a growth rate of 3% pa for single-section units and 4.5% pa for multi-section units.
It can be noted that a number of financial institutions have over time demonstrated their willingness to avail to high-design manufactured home would be owners a number of financing options. Though the arrangement was somewhat frustrated by the effects of the global economic meltdown; analysts are of the opinion that with the economy being on a recovery path, the high-design manufactured homes segment shall benefit greatly from the availability of a wide range to financing options to buyers of the homes. One of the most popular financing options has been to finance the house as personal property.
However, it is increasingly possible to finance the purchase of a high-design manufactured home through the utilization of mortgage financing (conventional). It therefore follows that all these factors combined with the inherent advantages of choosing a high-design manufactured conventional site-built home shall constellate to push the growth prospects of high-design manufactured homes going forward. The inherent advantages that accrue to buyers in this case include but are not in any way limited to ability of the high-design manufactured homes to appreciate in value just like conventional site-built homes despite their lower price, low acquisition costs etc.
Conclusion
In conclusion, it is important to note that the prospects for growth over the next 15 years as far as high-design manufactured homes are concerned shall essentially be driven by three things namely the ability of the segment to avail to families affordable and high quality high-design manufactured homes, the enhancement of evolutionary designs and lastly technological advances. These three factors can indeed be said to be some of the driving forces that shall shape the high-design manufactured homes segment going forward.
References
Hassell, S. (2003). Building better homes: government strategies for promoting
innovation in housing, Issue 1658. Rand Corporation
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