Real Estate News

What prefabrication could mean for homes

Published: 21 Jul 2017

The amount of speculation over the solution to housing issues should make the rise of alternatives less than surprising. One of the options gaining some attention is prefabricated homes. While some might associate the use of prefabrication with non-sustainable, and therefore less desirable elements, there seems to be a push to make these pre-made homes more available, for the cash-strapped younger buyers in particular.

Curbed reported that the design could, as many innovative ideas seem to, make its way through the U.S., perhaps via the tech industry. The source suggested that younger employees could live in these self-contained, easily assembled homes, solving an efficiency concern for major employers. At the same time, prefab could hold the key to an even larger trend that fills the needs of both developers and residents in different regions.

Expanding horizons
The basic selling point for prefabricated houses seems to be its relatively low cost, but that's not always going to be certain. Author and prefabricated homes enthusiast Sheri Koones spoke to The Seattle Times about the common assumptions about this production style and what the reality of prefabrication actually holds. According to Koones, advances in technology have helped blur the line between a "prefab" home and other types, making it more difficult to tell the origin at a glance.

"In the early days of prefab, the designs were limited," Koones said. "Today, the sky is the limit on what can be built prefabricated. Unfortunately, there is still a stigma regarding prefab construction among those unfamiliar with the process. But little by little, more people are finding out about prefab and saying it's the only way they would build."

Koones also said that the actual cost of building can vary depending on the location, but may also pale in comparison to other efficiency benefits over time. It seems clear that those who support the move to more prefab housing, like Koones, are going to emphasize the versatility of the process and material.

Production
An article in The Guardian hinted at another aspect of prefabrication which could make it more appealing: automation. There's the possibility for home production to benefit from automation, as manufactures can quickly and easily make all of the components they need for new homes, which are then shipped as needed. 

According to this source, the UK-based Legal & General Homes has plans to do exactly this with a new facility, and the source quoted the company's CEO as saying the process could lead to home delivery "within weeks" in that country. On the other hand, the article did note that these homes tend to be small and could struggle to meet housing and zoning requirements.

It's also not just the affordable housing sector that could benefit from better prefabrication, at least as its champions see it. JLL Real Views spotlighted the company Revolution Precrafted, an example of a business that uses the techniques of prefab building to appeal to the luxury market rather than the need for quick, small-scale homes. In this case, the target audience, primarily in the Philippines, could purchase these homes in the style of luxury designers, giving them a home that's both affordable and desirable, ideally.

At the very least, there's still high levels of housing demand to respect. Redfin's June Housing Demand Index figures reached a level of 136, a record high greater than any of the previous spikes stretching back to May 2013. Although the trend has been generally upward since May 2015, the Index did show peaks and valleys throughout this time, suggesting some possible turbulence to be aware of.