to download the full Modular/Whole-House Panel chart (PDF).
With the single-family market in shambles, the factory-built housing industry turned to new markets and a growing interest in green to survive a difficult 2008.
“We’re not trying to get out of the single-family business—that’s our mainstay,” says John Colucci, vice president of sales and marketing at Westchester Modular Homes in Wingdale, N.Y., which manufactured 230 single-family modular homes in 2008.
But with manufactured-home shipments down more than 30 percent to 81,900 units in 2008, according to the U.S. Census Bureau, companies such as Westchester have been forced to diversify. Westchester now fabricates a growing number of multifamily and commercial structures, which currently represent 25 percent of its business.
A company can’t afford to be complacent in a downturn, explains Colucci. “You’ve got to go after markets that you wouldn’t have gone after before because they were too complicated.”
For many factory-built companies, those markets include multifamily, commercial, and resort buildings. “Generally, 10 percent of our business is multifamily,” says Steve Scharnhorst, CEO of Camp Hill, Pa.–based Excel Homes, where multifamily represented between 15 percent and 17 percent of its business in 2008. “It will be higher in 2009,” he predicts. “That’s where the money is still flowing.”
The same trend is emerging at Genesis Homes, the modular division of Champion Enterprises in Troy, Mich., which produced 8,900 manufactured and modular homes for the U.S. market last year. “Our core market has certainly gotten tighter, and a lot of our builders are seeing the need for multifamily and rental buildings,” says Kevin Flaherty, vice president of sales and marketing for Genesis. That includes specialty developments such as military housing. Genesis, for example, is building modular homes for soldiers and their families at Fort Lewis in Washington state under a multi-year contract.
Genesis is also pursuing the resort market, building hotels in the mountains of Wyoming and workforce housing for service employees on Catalina Island, located off the coast of Southern California. It’s been a learning experience for the company, which has found that it must be more involved in site services with these physically larger structures than it traditionally has been with its modular single-family business.
But those are lessons that Genesis is happy to learn, seeing it as an investment in the company’s short-term revenue and its long-term prospects. “The more markets you’re spread across, the more you spread your risk,” Flaherty says.
Not all manufactured-housing companies have been successful at risk reduction, however. Fleetwood Enterprises, one of the country’s largest factory-built housing suppliers, filed for Chapter 11 bankruptcy in March 2009.