Friday, March 21, 2008

Modular dreams

Assembled houses offer homebuyers a quick, less expensive alternative

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Chris Rossi⁄The Gazette
Builder Jimmy Dean of Unique Construction of Derwood assembles a modular home on Woodfield Road in Gaithersburg last month for the Scuderi family.
Amid today’s gloom and doom in the housing industry, Vince and Stephanie Scuderi are happy — finally — to talk about building their dream home.

They chose a modular home design, an alternative construction method that can save time and money. When the Scuderis were ready to build their dream house on the 12 acres in Gaithersburg owned by Stephanie’s family since 1985, they wanted it fast — and modular was the ticket, Vince said.

Their builder figured that the modular home could be built in 90 days at a cost 15 percent to 20 percent less than ‘‘stick-framed” homes that might take a year.

Also, because their house is going up quickly, they are getting an edge on sharply rising costs of building materials, said builder Jimmy Dean of Unique Construction in Derwood.

The Scuderis say they are spending about $300,000 for the 3,200-square-foot modular home, including the basement. With septic fields, porches, driveway and other extras, the cost is about $560,000.

However, like the entire homebuilding industry, modular home sales are slow nationally, according to Randall Eaton, president of Modular Homes Network of Seattle. The group lists 40 modular home manufacturers that will deliver in Maryland, and there are more than 100 manufacturers nationwide.

Modulars constitute about 4.5 percent of all homes being built in Maryland, about twice the national average, says a Baltimore analyst.

Assembly required

The Scuderis’ eight-box modular home was made by North American Housing Corp. of Frederick. Typical of the industry, North American constructed the modules in a warehouse, put them together for a fitting, separated them and loaded them onto flatbed trucks for delivery to a 2-acre lot carved out of the family property.

The big day arrived for the Scuderis on Feb. 14, when Dean’s crew unwrapped the Scuderis’ giant Valentine’s Day packages and a crane nimbly eased each one off a truck and placed them on the foundation. The house was together within hours, with all the major workings in place, including framing, drywall, roofing, plumbing, electrical wiring, cabinetry and trim.

‘‘The only problem sometimes raised by the homeowner is that they see it assembled in one or two days, then wonder why it takes another 90 to 120 days to finish,” Dean said. After assembly, much work remains, including well, septic and other utility hookups, porches and decks, driveways and landscaping.

Framing for a modular home is similar to a more conventional design, but with more reinforcement. Also, unlike a house built on-site, a modular house is exposed to a minimum of harsh weather. Dean said mildew and mold collected on a frame of a conventional house can stay with the home for its life span in extreme cases.

Dean, a former police officer, started building homes in 1972. He was building only stick homes when he learned about affordable modular homes in the late 1970s or early ’80s and built his first modular home for his parents in Washington Grove.

‘‘When modular homes were sold in the 1970s, they were small and designed primarily for starter homes,” Dean said. Seven years ago, a sales representative of North American, Brian McGuiness, called Dean to ask him to look at an expanded selection of customized modular homes it could offer. ‘‘Now, we can build just about any kind of house. I think it’s become probably the fastest-growing segment of the building industry.”

‘Banks just love us’

Since 1971, North American has produced tens of thousands of structures, according to company information, including single-family homes, townhouses, condominiums, apartment buildings, additions, banks, motels, schools and resorts. It delivers to states from Connecticut to South Carolina.

McGuiness, now vice president of sales and marketing, said that despite the housing slump, the company is still growing in the modular market. Modular construction loans are easier to obtain and more predictable for lenders because of the constancy of the building process.

‘‘Banks just love us,” McGuinness said. ‘‘The homes are always third-party approved. There is also no issue in waiting for the home inspector. It’s the ideal solution in homebuilding for quick turnaround in today’s market.”

Home inspector Ronald Meely of Building Inspector of America, which boasts of more than 100,000 home inspections since 1976, said modular construction makes his job easier, with six to 10 inspections at the plant.

‘‘They are built rigidly, to go down the road at 60 to 70 miles an hour,” Meely said. Still, he said, for many people, modular homes still carry the stigma that it is a mobile home.

Robert Johnston of the Anne Arundel County Association of Realtors disagreed.

‘‘There is no stigma to modular homes any more,” Johnston said, with resale values comparable to stick houses. ‘‘You can’t tell by looking at them, but it should be disclosed.”

Dennis B. Melby, an agent with Long and Foster and president of the Greater Capital Association of Realtors, agreed there is no difference in value.

‘‘I haven’t sold many of them, but the whole process is so fascinating,” Melby said. ‘‘In the end you’ve got a great product and ahead of time.” He has not noticed growing sales of modular homes. They are most suitable for vacant lots close to the city, but not in tract home developments, he said.

Dean assembles about four modular homes a year, some as large as 13 modules. He didn’t build any last year because all his prospective customers failed to finalize their loans. Dean has seen a comeback in demand for modular homes this year, though.

‘‘People are going to have to build the same square footage [they initially wanted] for less money,” Dean said. ‘‘They need to look for ways to do that or decide that they can’t have the spacious house they were once counting on a few years ago.”

About 900 modular homes were built in Maryland in 2007, according to Fred C. Hallahan, principal of Hallahan Associates of Baltimore, which compiles industry statistics. Construction of modular homes peaked in 2004, he said, with about 1,200 built in Maryland and about 33,000 nationally.

‘‘It has been consistent with the drop-off of the same proportion with the drop-off of all homebuilding,” Hallahan said. The modular alternative is still growing and may reach 8 percent nationally by the end of the decade, he said.

‘‘It isn’t necessarily cheaper [to build a modular home] because it depends on the area,” he said. ‘‘In Montgomery County you stand a chance of saving money.”