BLU HOMES EXPANDS MANUFACTURING TO CALIFORNIA

A massive Mare Island industrial building near Vallejo, CA soon may emerge from years of dormancy with the help of Blu Homes, the MA modular home company that is a rising star in the Eco-friendly home building business.

The Building 680 on Nimitz Ave., a glassy-walled former submarine machine shop, is being eyed by a Massachusetts-based modular home manufacturer, according to officials for Mare Island's developer.  The 250,000-square-foot property underwent some $4.5 million of environmental remediation to return the building to manufacturing use. 

Building 680 in Vallejo, CA

Blu Homes is looking to expand its operations to meet a reportedly growing need for its products on the West Coast and Canada. The company, founded in 2007, has maintained a sales office in San Francisco since last year.  A Blu Homes spokeswoman did not specify how many jobs would be created with the company's arrival. 

I find it interesting that Blu Homes is coming to CA to build modular homes with designs they purchased from Michelle Kaufmann’s defunct modular home factory.  They sued MK Designs over the plans but I have never heard the outcome of the lawsuit.  If anyone knows what happened to it, please leave a comment.

"The company has been growing very fast and there would certainly be new jobs created," Dana Smith, Blu Homes'

The company advertises itself as certifiable under the environment-friendly Leadership in Energy and Environmental Design (LEED) standard. Blu Homes aims to be "green" with foldable home components for easier shipping and setup, and energy-efficient final products.

Lennar Mare Island officials are in the process of seeking permits from city departments and commissions in order to prepare Building 680 for use by the home builder.

KEISER HOMES PRESIDENT UPSET ABOUT LACK OF FED HELP

Keiser Industries President David Cutler told Rep. Mike Michaud on Monday that the inability of people to get financing is what is hurting the manufactured home industry the most.  Keiser Industries builds modular homes in Oxford, Maine.

Keiser Industries President David Cutler told Rep. Mike Michaud on Monday that the inability of people to get financing is what is hurting the manufactured home industry the most.

“The financing is what kills the housing industry. People with good credit just can't get the loans,” Cutler told Michaud during a 45-minute tour of the plant on Route 121.

Despite a recent $2 million contract with Maine Housing Authority and the state's attempt to make Maine a better place for businesses, Cutler told the congressman that “it's the private investor we survive on and the homeowner. It's tough. We see federal programs that come through but for us they've done little.”

Cutler said that until people feel confident in the economy they will not make capital investments in homes. Instead, they will pay rent to ensure they don't invest a large amount of money only to lose it.

“They know they can stop tomorrow if they have to,” he said of people's decision to pay high monthly rents rather than risk losing their home if they lose their job.

Although the company recently landed a multimillion dollar contract in Massachusetts to build a 53-unit apartment complex, Cutler said in order for the company to continue keeping its workforce going the it must have people who are willing to buy.

BOB VILA GIVES A TOUR OF THE SIMPLEX HOMES FACTORY

SIMPLEX HOMES SHOWCASES THEIR FACTORY WITH BOB VILA

You gotta love Bob Vila.  He loves modular homes and shows it off as much as he can on his shows.  Here is one of the best examples of the advantages of modular housing I've seen in quite some time.  Bob is touring the Simplex Homes factory in Scranton, PA and you can see the quality that goes into each home as well as the recycling procedures in the plant.

DROP AND SET - BUYER BEWARE!

Joe and Betty are caught in a dilemma, they have enough money to build the house they've always dreamed about but with the recession, they are trying to conserve money.  One way they've found is to buy a modular home.

They figure they can do the rest since the "industry" has been telling the consumer that 85-90% of their home is complete in the factory.  Sounds great to them and they look around locally, they find that the authorized dealer/builder wants to turnkey the house.  After Googling for modular homes on the Internet however, they decide they are going to buy a home from a dealer that promises great prices and fast turnaround time.  Having the dealer order the house and set it on the foundation and weather sealed is called a "Drop and Set".  You are your own General Contractor!

After checking out the dealer and finding that they sell homes from several of the biggest modular manufacturers in the country, they begin the process of buying a new home from them.  Everything goes well during the preliminary stages through to signed contract.  The dealer accepts their deposit and orders the stamped home plans.  Meanwhile Joe and Betty finalize their construction loan and get bids on the foundation and excavation since the dealer is several states away. 

The house arrives after the foundation is in, the loan is complete and all building permits have been issued.  This is a great day and everything is going just like the dealer said it would.  There is a representative from the dealer on site to meet the trucks and go through each module to make sure all the "ship loose" material is there, nothing is missing and that all the options were installed.  Still everything looks great.

Joe and Betty are ready to start completing their new home.

The dealer has offered to answer any question they have about completing the home and has even given them a guide to completing and finishing the home.  But no matter how much the dealer, who is several states away, tries to help, things go wrong and Joe and Betty are on the phone a lot.
Starting with interior, the plumber came in to connect all the modules together and install the water lines and toilets.  They also changed out some of the faucets.  First problem...the DWV pipes can't be connected without cutting through some of the joists and if they leave and have to come back later after the factory sends someone to fix them, they won't be back for a month...they have other jobs!  So they call the dealer who calls the factory and FINALLY gets the OK to have the plumbers fix the pipes.  Now the plumbers drop one of the toilets and break it.  Joe and Betty call the dealer again.  This time they tell the dealer that it was broken during shipment.  Since the dealer had somebody check it when it was delivered, this issue turns into a major confrontation because the plumber said "it was like that when I opened the box". 

Then the electrician moves in and Joe and Betty want him to add more lights to some of the rooms.  While walking across the joists in the attic, his foot breaks though the ceiling and damages the sheetrock.  Again, Joe and Betty call the dealer but he tells them that they didn't hire the electrician, Joe and Betty did.  Suck it up!
After these "minor" problems, the drywaller moves in and starts doing his thing.  It's a nice day and he wants all the mud to dry overnight so he leaves the windows open slightly and you guessed it....rain!   And did I forget to tell you, the carpet was factory installed!  By the time the dry wall was finished and the trimmer and painters completed their work, more problems arose.  Add the problems from the siding crew who said there was not enough siding and you've got Joe and Betty on the phone to the dealer just about every day.  The factory is getting calls about siding, mold in the rooms, water damage from leaking water lines and much more.  Most of these items are NOT THE FACTORY'S FAULT!  They are the subcontractors fault, which normally would be handled by the modular home BUILDER, who in this case is NOT the dealer, but rather Joe and Betty!

I've seen "Drop and Set" houses turn into disasters with the homeowners never moving into the home.  Lawsuits are started against the dealer and the factory.  And every time something new happens, Joe and Betty tell everybody what shoddy workmanship the factory did. 

Modular homes are prime for this type of "dealer"  Drop and Set.  A lot of manufacturers say that they don't allow this type of home sale, but when there's a recession on and people try to save money any way they can, are the modular home companies turning a blind eye?

If you are a buyer, you should go with a local builder/dealer who actually does the work and is responsible for giving you a finished and complete home.  Remember, if you do your own home finishing, YOU ARE RESPONSIBLE FOR THE PROBLEMS CREATED BY YOUR SUBCONTRACTORS, NOT THE FACTORY OR THE DEALER!

MANUFACTURED HOUSING IS SO YESTERDAY

They average about half the cost of a regular house, yet "manufactured housing" -- called mobile homes or trailers in the 1970s -- is on the downswing amid the downturn. 

Single Wide Manufactured Home

According to MHI, a trade group representing the factory-built-housing industry, in 2003, there were 130,937 units sold; in 2010, only 50,046 units were sold. Thayer Long, president of MHI, however, said manufactured housing as a percentage of new single-family houses is up slightly from 11.7% in 2009 to 13.5% in 2010.

Andy Gallagher, executive director of West Virginia Housing Institute, blames a lack of industrywide marketing. "MHI went through a big discussion recently, but the manufacturers defeated the proposal because they believed it would drive up the prices," he said. "We need to attract political leaders, get them into the lots, help them understand that our industry is not about the old tinny mobile homes of the '70s but about spacious and affordable living." 

One problem has been that with falling prices on site-built homes, the perceived price gap is lessening. According to Mr. Long, in 2009, manufactured homes were available at $41 a square foot and site-built homes at $83 a square foot. 

Who's buying? Mr. Long said the industry has a specific market with which it is very popular.

"We have the 55-years-and-older market, the retiree market. We've also done well on the entry-level market and particularly the rural market. Then there are the millennials -- these people are coming into home-buying age [25 to 34] and are more discerning and educated consumers" who look to buy rather than rent.

Some manufacturers have targeted other demographics and seem to have bucked the trend. Joe Stegmayer, president-CEO of Cavco Industries, a Phoenix-based marketer, reported a $1.6 million profit last quarter.  Cavco, through their Fleetwood Homes division, recently purchased Palm Harbor Homes, a manufactured housing company and its real modular home division, Nationwide Homes.

"We made an effort to reduce overheads, increase market shares and have also been doing some heavy marketing," said Mr. Stegmayer. "With our advertising, we've tried to go for a number of different niches rather than universal campaigns. We're trying to address the immigrant population, the baby boomers, the echo boomers. The echo boomers are potential first-time home buyers ... we want them to know they can have a place of their own."

IS GOING GREEN A TOUGH SELL TO NEW HOME OWNERS?

Green costs more, and today's already-skittish potential home buyers are not willing to shell out more cash for a greener standard of living.

"I believe that buyers appreciate 'green' features, but they are not yet ready to pay extra for them," Bob Parris, broker/owner of Manchester Realty in the Chicago area.

There is no question that Americans are more aware of and more receptive to the green movement than ever before, but green home features are still extremely costly, and while some can, over time, lower energy costs, it's often over a long period of time, and to many, not worth the up front cash right now.

I know of several modular home factories that have Energy Star programs in place with everything from design to final home rating and everything in between but even here the new home buyer is starting to question why they need to spend thousands of dollars to save a couple of hundred a year, knowing that they might not be in the house long enough to see any rewards or savings.

There are a lot of products used in homes today that are more energy efficient right out of the box than there ever has been before and some of these are now standard features with modular home factories, like windows, doors, insulation and roofing.

Will the new home buyer embrace eco-friendly homes if the price is too high?  I doubt it.

EXTREME MAKEOVER UPDATE

I saw this article on the Fayette Observer's blog and thought I would share it with my readers.  Blue Ridge Log Cabins, the factory that provided the modular home, is really promoting it and doing a great job.

Blue Ridge Log Cabins has kindly put up an online video stream so you can watch the house be built from the comfort of home. Blue Ridge, who is based in South Carolina, specializes in log cabin modular homes, so the pieces are being brought to the Langdon Street site now. Go here to watch this architectural feat happen. Remember, this whole thing must be done by Thursday!

Brian Dukes, who has been at the site today, says the camera normally has been in the VIP tent, but it's brought out tonight so we can watch the house being put down on the foundation. Pretty nifty, huh? Let's hope that the camera stays outside. No offense, VIPs, but we want to see some action!