Friday, June 18, 2021

Ireland's Off-Site Housing Predicted to Rise to 60%

Ireland, like every other country, finds itself in need of more housing than site-building alone can provide. Facing the same problems of rising costs, shortages of building materials, and skilled labor the rest of the world is facing, they are doing everything they can to move to off-site housing including prefabrication and modular construction.

The majority of new homes in Ireland could eventually be built in factories off-site, a Construction Industry Federation conference has heard.

With Ireland's chronic housing shortage and undersupply set to continue into the future, the 2021 Digital Construction Summit held recently heard from a number of speakers on ways the challenges in the construction industry could be met.

In his opening address to the conference, the CIF's director of specialist contracting Sean Downey said the industry needed to adjust the way it operates in order to meet the challenges of climate change, the digitization of the sector, and supply-chain optimization through the greater use of off-site manufacturing.

He also cited a report completed recently for Enterprise Ireland UK which shows that 60% of the traditional ‘stick built’ sector will go to an off-site delivery model within five years.

Micheál Keohane, a director with BAM Ireland and Modern Homes Ireland, which specializes in modular homes, told DigiCon that when constructed off-site, a pair of semi-detached houses can be brought to site and are in place in less than a day — 90% complete and fully weather-tight. He said that alongside the speed there was a range of other benefits. 

"There are eight times the off-site quality checks than there ever could be on-site," he said.

Paul Carty, director of construction in Ireland for Ballymore, which has 15,000 homes under constriction in Ireland and the UK, said modular and off-site construction still only forms 7%-10% of the industry.

"It's a very low volume," he said. "However, the private sector isn't able to sustain the modular industry in its own right, so the public sector needs to step in here.

"If running a factory, you need to feed the factory continually. It's very important that the industry recognizes this. 


Gary Fleisher is the Managing Director and contributor for Modcoach News and Modular Home Coach. 

Email at modcoach@gmail.com

Thursday, June 17, 2021

Is Totally Integrated Modular Construction Just Around the Corner?

Modular construction has become not only the newest way for investors and developers to build multifamily and hospitality, it is also about to give them something rather unique that could change the construction industry in the US.


That unique idea is Total Integrated Modular, "TIM".

Today’s developer has entire departments dedicated to designing and sourcing contractors to build out their developments. The hospitality, affordable housing, and even the low-income housing developers across the US usually have the same services in-house.

But what would happen if a developer or investor only had to be concerned with the Master Plan engineering and everything else would become the purview of say, the modular factory or another single source. Everything from structural and architectural design to approvals to manufacture, delivery, set, and finish?

For developers, after the "Net Developable Area" is determined, putting together all the design teams, contractors and manufacturers is much more time-consuming and capital depleting than most would admit.

The commercial investor/developer has all those but may have far less of a demand for unique design than the housing developer.

The biggest problem to overcome is who is this “Superman” of modular construction? Will it be the General Contractor, the people running the modular factories or maybe a new entity that oversees and directs everything.

What would have been sheer conjecture just 10 years ago is rapidly becoming reality. With new technology coming on-stream almost every day enhancing all phases of the project, the idea of one company being the ‘go-to’ source is almost and maybe already is, a reality.

BIM, A/R, CLOUD, Elasticsearch, V/R, video conferencing and almost instantaneous blending of everything from initial drawings to manufacturing, all the way to the final cleaning of the project is now possible for a single entity to control.


And so, this is the “Question of the Week”:

Would Developers and Investors turn over control of their projects to a single source?


Gary Fleisher is the Managing Director and contributor for Modcoach News and Modular Home Coach. 


Email at modcoach@gmail.com

Fire Brings Down Huge Unfinished Offsite Construction Project

A large structure fire in the Millcreek area was seen all across the Salt Lake Valley late Tuesday afternoon. 

The fire was located at an apartment complex under construction flames reportedly reached up to 100 ft. 

Officials said the hot and dry conditions made the building go up in flames extremely quick.

"All the wood is preheated its warm with these heats and humidity drops. No moisture in the atmosphere and the fuels are dry and incredibly and receptive to heat and flames," said Patrick Costin with Unified Fire Authority. "That's why they burn so quickly and so hot."

Gary Fleisher is the Managing Director and contributor for Modcoach News and Modular Home Coach. 

Email at modcoach@gmail.com

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Wednesday, June 16, 2021

As Lumber Prices Cool, Home Building Gets Hot!

Good news and a little not-so-good news for the home construction industry means that overall, housing starts are still in a good place. Look for the remainder of this year to show record growth in single-family housing.

Housing starts rose 3.6% to a seasonally adjusted annual rate of 1.572 million last month, the Commerce Department said on Wednesday. April’s reading was revised lower to 1.517 million from 1.569 million. Economists surveyed by Refinitiv had expected housing starts to rise to 1.63 million.

Starts surged 50% on a year-over-year basis in May. Homebuilding rose in the Midwest, South and West but fell in the Northeast. 

The slight increase in homebuilding came as lumber prices topped out on May 7 and fell 22% through the end of the month, finishing below where they ended April. A lumber shortage that developed in the aftermath of COVID-19 lockdowns caused the cost of the critical material to soar, resulting in builders putting off projects and losing confidence.  

Permits for future construction slipped 3% to a rate of 1.681 million units in May, missing the 1.73 million units that economists were expecting. 

The drop in builder confidence was reflected in the latest National Association of Homebuilder’s/Wells Fargo Housing Market Index that was released on Tuesday. The index fell two points in June to 81, a 10-month low which is still darn good!

Gary Fleisher is the Managing Director and contributor for Modcoach News and Modular Home Coach. 

Email at modcoach@gmail.com

Is Modular Construction the Perfect Choice for "Build to Rent" Developers?

One of the new things many developers are looking at is the "Build to Rent" housing market. Prompted mainly by younger homebuyers being priced out of the housing market by ever-increasing prices, developers have seen an opportunity to help them move into a new home.

The "Build to Rent" developer focuses on small rental homes, located in areas well served by public transport and in cities with great economic dynamism and a great demographic movement. Many renters are choosing long-term rental as their option. 

The working-from-home crowd is moving to rentals since they don't have to uproot their family when and if they change employers. Working from home means security for them.

The majority of single-family home rentals in the US are privately owned and managed with only +/- 3% being under professional management. Under the build-to-rent model, a community of single-family homes is developed with the intention of appealing to the rental market, and the community operates similarly to a traditional multifamily asset. 

The real innovation in the build-to-rent space lies in the improved experience for tenants. BTR provides tenants with all of the best aspects of single-family rentals and upgrades the experience by developing all homes inside a professionally managed, amenity-rich community all without burdening residents with HOA costs.

Not only will young people begin accepting this type of housing but Boomer's downsizing will be attracted to renting over owning as well. Families thrive in Build to Rent properties because each property features a private backyard, providing each family with ample space to raise their kids.  

Unlike the multifamily developer that rents apartments and townhouses, the single-family rental developer will have more of an investment, especially in meeting single-family home zoning requirements for their area. Many will be required to have garages rather than carports.

Look for higher rents for these homes but I'll bet people will be lining up at the door wanting to rent one as the word about this type of community spreads. 

For the modular housing industry, this could prove bigger than Hurricane Sandy when thousands of modular homes were built in a short period of time. This could actually see many new modular factories being opened simply to build a limited number of standard plan single and two-story homes being built.

If you are a "Build to Rent" developer and haven't looked into modular yet, be sure you do as getting your homes up and rented will never be faster than going with anything other than modular!


Gary Fleisher is the Managing Director and contributor for Modcoach News and Modular Home Coach. 

Email at modcoach@gmail.com

Tuesday, June 15, 2021

Lumber Prices are Falling Back to Earth

Futures for July delivery ended Monday at $996.20 per thousand board feet, down 42% from the record of $1,711.20 reached in early May. Futures have declined 14 of the past 15 trading days, the last two by the most allowed by exchange rules.

Cash lumber prices are also crashing. Pricing service Random Lengths said Friday that its framing composite index, which tracks on-the-spot sales, dropped $122 to $1,324, its biggest ever weekly decline. The pullback came just six weeks after the index rose $124 during the first week of May, it's mostly on record. Random Lengths described a chaotic rout in which sawmill managers struggled to provide customers with price quotes.

Economists and investors have wondered if sky-high prices for wood products would doom the booming housing market. Builders raised home prices and many stopped selling houses before the studs were installed, lest they misjudge costs and sell too cheaply. Lumber became central to the inflation debate: whether a period of runaway inflation was afoot or high prices were temporary shocks that would ease as the economy moved further from lockdown.

The rapid decline suggests a bubble that has burst and the question now is how low lumber prices will fall. Even after tumbling, lumber futures remain nearly three times what is typical for this time of year. Lumber producers and traders expect that prices will remain relatively high due to the strong housing market, but that the supply bottlenecks and frenzied buying that characterized the economy’s reopening and sent prices to multiples of the old all-time highs are winding down.

CLICK HERE to read the entire June 15th Wall Street Journal article


Gary Fleisher is the Managing Director and contributor for Modcoach News and Modular Home Coach. 

Email at modcoach@gmail.com

A Personal Tour of Lindbäcks Modular Factory in Sweden

This a must-see video tour of one of the largest modular factories in the world presented by Dave Cooper, the off-site construction industry's leading "live" vlogger. 

If you are currently in the modular construction industry, this is a view of where our industry heading. If you are a developer or investor looking at modular to give you an advantage in time and labor, you really need to watch this.

But don't think for a moment that the US isn't using Lindbäcks success to build new factories. Several are already up and running here. All of these modular factories are geared for fast production which means that if you build custom modular homes, these may not be the factories to use. They are best suited to investors and developers.

So grab a light refreshment, sit back and enjoy Dave Cooper's walking tour of Lindbäcks.


At DaveCooper.Live our goal is to engage with industry thought leaders, share their stories and move forward the conversation around disruption in the new home construction industry.

Be sure to subscribe to Dave's YouTube Channel for more of his hundreds of "live" video tours and chats with some of the most influential people in our industry.

Monday, June 14, 2021

Neighborhood Housing Codes Changing to Include Everything From RVs to Yurts

Many towns and counties are considering how to incorporate small homes into the community. These include tiny houses, both on wheels and off, Auxiliary Dwelling Units, and even RVs in some instances.


Some are even considering a new use for urban RV parks by designating permanent residence status. 

A unique situation has arisen in the RV market since COVID-19 restrictions have been lifted and people begin returning to the workplace instead of working remotely. Many of those workers bought RVs and Motorhomes and traveled while still being able to work remotely.


That is changing as evidenced by the number of websites popping up offering to buy used RVs and motorhomes. 


While that is a good move for many former work-from-home employees, others are trying to move them into RV parks and even into their backyards where they will become rentals.


While many local and county governments don’t think this will ever be a long-term solution, they think that it’s a better option than the street. But once those Residential Housing Codes are amended to include all those small alternative housing types, will it ever be reversed?



According to officials in some areas that have already made the change to allow them into R1 neighborhoods, they don’t have to meet the stringent building codes for new homes but rather meet a more lax “health and safety” inspection...whatever that is.



While tiny homes are compact structures, they can come in many forms. These homes can vary from being on wheels like RVs, converted buses, or vans to stationary homes like yurts, shipping containers, and cabins. Even older R1 neighborhoods with large homes may soon see tiny houses popping up in backyards to bring in additional income.


These new small homes can also be used as Airbnb rentals, homeless housing, Section 8, and halfway houses. There doesn’t seem to be any restrictions against this within the codes many communities are adopting.


The US housing market is changing and zoning and codes are changing to meet it. Unfortunately, it may have a detrimental long-term effect on traditional single-family neighborhoods.



Gary Fleisher
is the Managing Director and contributor for Modcoach News and Modular Home Coach. 


Email at modcoach@gmail.com

Sunday, June 13, 2021

Post COVID-19 Forcing Modular Industry to Change Horses Mid-Stream...Again!

There are many modular startups and established factories that may soon start going south, not because they are poorly managed or under-funded. They had a business plan and lots of potential business but now the business plan they worked on so hard before the pandemic is not working now with higher demand, labor shortages, and rising LBM costs.


When this happens, business leaders face a critical dilemma: They can stay the course and see if their current strategy just needs a little more time, or recognize that a change in direction is necessary for the business's survival.

Many modular factories are finding a changing landscape. Dave Boniello, vice president of Scranton’s Simplex Holmes, said: “We have seen dramatic growth in the business of single-family homes. Single-family homes have always been an active part of our business, but there has been a significant increase and it continues at a very good pace.” He predicts that the company will outperform last year’s single-family home sales by at least 75%.

This evolution in what modular factories are building today compared to what they used to build just a year ago has forced the traditional modular home factory to once again focus on single-family homes.

Innovations in single-family home production require factories to start listing both their strengths and weaknesses in order to better understand the impact change is having on them. Listing what your factory does well should be easy but listing and admitting to what your factory doesn’t do so well is a lot harder. And there are also the other things that keep you awake at night like out-of-control material costs, product and labor shortage.

Without a full list of both, you will never move successfully in the right direction. Start by having internal conversations with everyone that works with you to produce product including your builders and investors. What they may have wanted when they first talked with you could also be changing.

A big change in recent years is the "build to rent" investor/developer wanting to use modular to get people into homes faster than site-building their homes.

“Some traditional builders tell their customers that they haven’t been at home for more than a year,” said John Colucci, chairman of the Modular Home Builders Association. “In a modular business, we know exactly when we can deliver a home to someone. It only takes six days to build a 3,000-square-foot colony at our factory.”

Recreating and innovating as you uncover changes is a key to success. Being locked into what you’ve always done or what you thought they wanted can lead to stagnation and erosion of business.

A veteran of the off-site industry says that he is not afraid of someone following in his footsteps, he is more concerned about the person t-boning his plans that he never saw coming.

Encourage everyone in your company to look for external threats and opportunities. This is healthy paranoia for a company just starting out and for established companies that thought they owned their market.

To learn who is planning and maybe even executing a process that could challenge your company you need to spend time reading industry journals, attending conferences, listening and watching podcasts and vloggers, and talking to your customers and investors. If someone has an idea they want to sell, you can bet your bottom dollar they are talking to your customers and investors.

Try not to get distracted by the small stuff, and figure out which threats or opportunities are actually worth action.

If and when you’ve pinpointed a threat significant enough to warrant a change in your business, it’s time to sit down with others in your circle and talk strategies.

If someone were to build a modular factory just down the street from you building the same product as you and sending out their reps to your builders and investors, I’m sure you would react quickly, probably by doing what you’ve always done...give discounts or lower your prices. But there are other strategies you can explore, you just have to look a little harder.

Now imagine that factory was a hundred miles away and you knew nothing about them until they opened their doors and t-boned you by stealing your builders and investors. Now those purposeful strategy meetings you should have had with your staff will become panic meetings.


You must be constantly working to recreate and innovate. The modular industry is changing and being one of the last kids on the block doing it the same way you’ve done it for decades just won’t work today.

Once you and your team have decided on what strategy you are going to implement, you have to generate a company-wide “buy-in”. A best practice when making company-wide changes is to talk to each department head personally and find out what he or she may want to know before putting your final vision into motion.

Generating support throughout the company means you will be stronger and more able to fend off those t-boning competitors.

And finally, remember that the need to evaluate threats and opportunities, and to change your approach, is ongoing. This isn’t 1990 where everything was butterflies and flowers.

Today the pace of change within the modular housing industry is more like survival of the fittest with the loser closing their doors simply because they couldn’t figure out how to implement the changes necessary to stay competitive.

Single-family homes are once again taking center stage in modular construction. In the words of that famous baseball philosopher, Yogi Berra, "It's like déjà vu all over again."

Let’s hope you begin looking at what is changing in our industry and take steps to innovate, generate and reinvent your factory to meet tomorrow's modular needs.


Gary Fleisher is the contributing editor of the Modcoach News blog and industry speaker/consultant.

Thursday, June 10, 2021

Warren Buffet's Clayton Homes and MiTek Move Into Commercial Offsite Construction

In a move nobody in our industry is surprised he made, Warren Buffets' Clayton Homes and MiTek are taking the next logical step for both horizontal and vertical integration in the offsite commercial construction.

Warren Buffett is forging further into modular construction, leveraging the Berkshire Hathaway-owned MiTek engineered building products and construction software firm to launch a hybrid offsite-on site building model targeted at hospitality, health care, education and multifamily construction.

The model, which is similar to the flat-packing and shipping of consumer products that are then assembled by the end user, would solve one of modular's biggest challenges — the transportation of factory-built units to jobsites where they are stacked together. Transportation is expensive, and hauling regulations around wide loads limit the design parameters of the buildings.

CLICK HERE to read the entire ConstructionDive article


Gary Fleisher is the Managing Director and contributor to the Modcoach Network and its affiliated blogs.

Email at modcoach@gmail.com

June's Newest Modular Industry Job Listings

Labor Shortage...What Labor Shortage? Check out the Active Candidates section for your next new hire or if you are ready to change jobs, check out the Open Positions section. 

The Active Candidates section below represents candidates looking for new career opportunities.

The Open Positions section represents companies, who are looking for candidates to fill their open positions.

Contact Lynn Gromann at 888-831-0327 or Lynn.Gromann@LGARecruiters.com if you would like further information on an available candidate or on an open position.

Active Candidates
EXECUTIVE / FINANCIAL
  • CFO - Multifamily MOD - West Coast
  • General Manager - HUD / MOD - wants TX or Southeast
PRODUCTION / OPERATIONS
  • Production Manager - HUD/MOD - possible relo
  • Production Manager - HUD/ MOD - wants South
  • Production Manager - HUD/MOD - wants Southeast
  • Assistant Production Manager - MOD - wants warm climate
  • Operations Manager - Commercial MOD - wants Dallas/Ft. Worth
ENGINEERING / ARCHITECTURAL
  • AutoCAD Designer - wants to move to TX or Southeast
  • Senior Drafter - Commercial MOD - wants TX
SALES / MARKETING
  • Sales Manager - HUD / MOD 20+ years, wants FL

Open Positions
EXECUTIVE / FINANCIAL
  • COO - MOD / Commercial MOD- Southwest
  • General Manager - Steel MOD - Southeast
  • General Manager - MOD - Pacific NW
PRODUCTION / OPERATIONS
  • Assistant Production Manager - MOD - Southeast
  • Assistant Production Manager - Commercial MOD - Southeast
  • Project Manager - Commercial MOD - Southwest
  • Assistant Operations Manager - Commercial MOD - South
  • Assistant Production Manager - Multifamily MOD - Southeast
  • Assistant Production Manager - HUD / MOD - Pacific NW
ENGINEERING / ARCHITECTURAL
  • Architectural Drafter - MOD - Southeast
  • Engineering Manager - Steel MOD - Northeast
  • Structural or Civil Engineer - MOD - West or remote
SALES / MARKETING
  • Sales Manager - MOD - Pacific NW
  • Sales Rep - MOD / Commercial MOD- Southwest
  • Sales Rep - MOD - Midwest
MATERIALS / PURCHASING / ESTIMATING
  • Purchasing Manager - MOD - Mid-Atlantic
  • Purchasing Manager - Commercial MOD - South
  • SERVICE / QUALITY
  • Quality Assurance Manager - MOD - Southeast
  • Quality Assurance Manager - Multifamily MOD - Southeast

Contact Lynn Gromann at 888-831-0327 or Lynn.Gromann@LGARecruiters.com if you would like further information on an available candidate or on an open position.


Gary Fleisher
is the Managing Director and contributor to the Modcoach Network and its affiliated blogs.



Five Offsite Leaders Discuss Katerra's Impact on Our Industry

Unfortunate as it is that Katerra faltered and filed bankruptcy, they gave us many innovations and their employees were some of the brightest and best to be found. The folks at Dave Cooper Live held a historic event right after the news broke of their demise in a lively discussion with five of the most recognized people in the offsite construction industry.

Helena Lidlow (Lindbacks Bygg) joins Rick Murdock (Autovol Volumetric Modular), Gerry McCaughey (Entekra), Hardy Wentzel (Structurlam) and Ben Hershey (4Ward Solutions) joined Dave Cooper for a live interview of all things Katerra.

Dave asked the following questions of these leaders and their responses are well worth watching the video below to learn what they shared.

  1. What are the biggest learns from Katerra?
  2. Helping others avoid mistakes and achieve success
  3. What about the people? Welcoming the Katerra employees
  4. What are the financial implications?
  5. Changing the headline in offsite construction



At DaveCooper.Live our goal is to engage with industry thought leaders, share their stories and move forward the conversation around disruption in the new home construction industry