Affordable home

Once again, bad news begets good news.

For homebuilders, the latest news couldn’t be worse.

Sales of new single-family houses in February 2010 were at aseasonally adjusted annual rate of 308,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 2.2 percent (±15.3%)* below the revised January rate of 315,000 and is 13.0 percent (±12.2%) below the February 2009 estimate of 354,000.

Each successive month has been setting a record for being the worst annualized monthly sales numbers for about 75 years. In better times, these numbers were three or four times what we have seen in than these last few months.

It’s tough times in our business. What’s a homebuilder to do?

What we are doing is learning and changing at a very rapid rate. Like any species or organism catapulted into a new environment, the laws of the jungle are simple: change or fade away. So we are paying very careful attention to what is wanted and needed by those homebuyers who remain in the market. That’s where the good news comes in. People now want homes that are smaller, better and cheaper, and we can do that. The first two aspirations are our sweet spot and the third one suits us fine, as long as all our better building standards are accounted for. The challenge is a good one, and we think we’re measuring up.

The home under construction in our shop this week represents a great milestone for us. We are building a complete turnkey home, including foundation, excavation, fixtures and good finishes for about $150K.

The home has about 1000 square feet, on one level. The living area and the bedrooms have cathedral ceilings. The area over the bath and central closets has a flat ceiling with access for storage and mechanical systems. This home will be full of natural light and will have a grand volume in the public area.

Shed roofs over the windows will help to provide summer shading and their brackets help to break up the facade. The home is simple but still has some nice features and will be extremely tight and energy efficient.

How do we give high quality and low cost at the same time? Our shop conditions are the key. Most of the cutting and shaping is automated and extremely accurate. We simply have to assemble the individual elements and components in the most efficient manner. With our off site building system, we have a parallel fabrication process instead of the linear system that must be adhered to on site. We can do many things simultaneously, which cuts down on time and costs. The walls elements are framed, sheathed, insulated and have their windows installed in the same day. We then can apply both interior and exterior finishes at the same time, working both inside and out, while always being indoors and in “good weather.”

Prefab walls

While the walls are being built, the roof panels are also being built in a different shop area. The sheathing and interior drywall will be applied, insulation (dense-packed cellulose) will be blown in.

Floor building
Meanwhile, we are also preparing the interior partitions and trim, cabinets, etc. When the home goes up in a few weeks, it will happen very quickly. The enclosure will be complete in a few days and the home will be completed in a few weeks afterward.

So, how do we survive in this economy? Simple. Compress time and cost. Enhance quality.

I’m proud to have this excellent example of how our company is proving itself to be a “complex adaptive” survivor in a tough economy. It’s also exciting because it represents fulfillment of a company goal established almost 30 years ago. I’ll say something about that in my next post.

I’ll also show more photos when the house is raised and assembled on site.

3 thoughts on “Affordable home

  1. Sales of new single-family houses in February 2010 were at aseasonally adjusted annual rate of 308,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 2.2 percent (±15.3%)* below the revised January rate of 315,000 and is 13.0 percent (±12.2%) below the February 2009 estimate of 354,000.. This is really a very good news and it is very useful for my business. Thanks Tedd.
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  2. Excellent site, keep up the good work. I read a lot of blogs on a daily basis and for the most part, people lack substance but, I just wanted to make a quick comment to say I’m glad I found your blog. Thanks

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