Why traditional homes aren’t in danger

Alternative homes, while increasing, will stay niche

By Robert Curran

Now and again there are news articles discussing alternative forms of U.S. housing, which the author speculates will take the market by storm. It’s gone as far as shows on television like ‘Container Homes’ and ‘Tiny House Builders’ that extol the many benefits of these alternative homes.

Among these unique, non-traditional homes built and sold include cargo homes (converted from unused shipping containers), log homes, geodesic domes, and earth sheltered and/or underground homes. Often, the allure of the homes is a lower cost to build and maintain than conventional homes, interest from an environmental perspective, and, frequently an unusual look, appealing to some.

Although demand for this category of housing may expand ahead, it seems to aesthetically appeal to a limited audience and is unlikely to represent a meaningful share of the future housing market. Why?

Conventional housing seems to already meet the needs of most customer segments and many of these unconventional homes are typically viewed as having inferior construction. Also, financing is particularly challenging to arrange for these non-traditional housing products (and often more costly than for conventional homes), local zoning may not allow this type of housing, the buyer has to separately secure land on which to situate it and adjacent home owners may oppose such homes as a depressant on the value of their conventional homes.

These non-traditional homes usually are smaller than conventional homes and frequently have to be located in remote areas that tend to have limited or no zoning.

This is not to say that every homebuyer will stick with the most traditional single-family detached, wood-frame home with a yard. There are also townhomes, semi-detached dwellings (including duplexes and stacked apartments), traditional apartments, and condominiums. Additionally, there are also modular (prefabricated) homes and manufactured housing (mobile homes).

Modular housing is a single-family detached home built to local or state building codes in a factory, shipped in segments and then assembled on site. Manufactured housing is also built in a factory but to a national pre-emptive manufactured housing code. It has its own chassis and wheels, and is towed to a manufactured housing rental park or private piece of property where it is sited. Sometimes two or more units are permanently joined at the site. However, the product is rarely moved after its initial siting.

Modular and manufactured housing shipments accounted for an estimated 1.3% of all housing turnover (including existing homes) in 2015. Their share of newly built housing was an estimated 7.1% last year. The other categories of non-traditional homes built represent an even smaller percentage of the total.

Conclusion

The face of the traditional home is not likely to change anytime soon despite the advent of modular homes, manufactured housing, ‘cargo architecture’, log homes, geodesic homes and the like.


Originally published at thewhyforum.com.