Smart Buying
Fabulous Prefabs
Save money with an upscale dwelling that arrives on a truck and goes up fast.
By Sean O'Neill
From Kiplinger's Personal Finance magazine, July 2006
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Scott and Lisa McGlasson love canoeing, their two sons enjoy fishing for walleyes, and their daughter likes catching fireflies. To indulge their pursuits, each summer the family would bolt from their Minneapolis home to rented cabins at Little Pequaywan Lake, in northern Minnesota.
In 2003 the McGlassons bought a half-acre lot on the lake to build their dream getaway. The couple wanted to keep a lid on building costs, but they did not want to sacrifice great design and solid construction. They met both goals with a two-story modern built by Alchemy Architects, in St. Paul. "During the day we have a lake view from 8-foot windows," says Scott. "But when we close the curtains at night, the living room is chic enough to feel like a New York City apartment."
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The McGlassons' hideaway -- with two bedrooms, one bathroom and tons of personality -- is a prefabricated home. The components were assembled in a factory, trucked to their lot and put together. But forget double-wides and trailer parks. Today's prefabs are going upscale.
A number of architectural firms now design the homes, then either partner with a prefab manufacturer or have their own factories build them. The homes are meant to be petite and low-maintenance, making them ideal for vacation retreats -- although buyers often choose to add a basement or a second story, raising the houses out of the cottage class.
Upscale prefabs generally run $120 to $300 per square foot, including all costs, from the foundation to the paint on the walls. That's 20% to 30% less than you'd pay for houses custom-designed by architects and built conventionally, although such prefabs are more expensive than mass-produced suburban tract-type houses. Second homes tend to be custom built because buyers want their vacation retreats to have unique, stylish designs -- with features such as the right angles and floor-to-ceiling windows of the mid-century modern style -- that builders of tract-type houses rarely sell. Most upscale prefabs showcase this modern style, giving them a custom-built appearance.
Scott and Lisa paid $95,000 for their second home. They chose the layout of the first story from a half-dozen of Alchemy Architects' plans and added a second story to the blueprints, expanding the size to 780 square feet. The firm hired a Wisconsin factory to manufacture the house's components, a process that took about six weeks. The components were trucked from the factory on a flatbed, and a crane helped assemble them (delivery and crane costs ran $6,000). The McGlassons hired contractors to connect the house's wiring to the electrical grid, dig a well and do other finishing work. The final tally was about $160,000, including fixtures and appliances.
Skittish about the sturdiness of a prefab home? That's a reasonable worry given how trailer parks fare in tornadoes. But the prefab makers cited in this story either build to meet local building codes, or build houses that meet the codes in all of the states in which they sell, making the houses at least as sturdy as conventional ones. For example, the firm Rocio Romero's LV150 home can withstand 150-mile-per-hour winds. Other firms, such as Michelle Kaufmann Designs, sell models that are up to code for use in California's earthquake alley.
Here's the lowdown on the two major styles of upscale prefab homes: panelized and modular. We also offer tips on picking your architectural firm, builder and bank.
Most adaptable
Panelized houses are made of sections stuffed with wiring and insulation. The panels are trucked to your lot, where contractors hired by you (or less commonly, by the prefab firm) join them together. Panelized houses tend to cost more than modular ones. But because the panels can be arranged in different ways, panelized houses can have custom options.
For example, Charlie Lazor, owner of the architectural firm Lazor Office, says that panelized houses can be more intimately integrated into the landscape of your lot. "Our panelized houses can turn corners, take on L-shapes or U-shapes, or step down steep hills," he says. Modular construction doesn't offer that flexibility and generally requires a flat, roomy foundation. The flexibility of a panelized house makes it superior for building on mountain, beach and lakefront locations, which tend to have more quirks than the typical suburban lot.
With a few exceptions, a panelized home runs between $300,000 and $450,000 for a 1,500-square-foot house -- including delivery, construction of a foundation and finishing work.