Modular homes’ value can fluctuate depending on what prospective buyers are willing to pay. A well-maintained modular home can increase in value over time, but several factors can drive your home’s value down, including some things in and outside of your control. This article will discuss the difference between modular and stick-built homes as well as how homes appreciate and depreciate to help you answer the question, “Do modular homes hold their value?” Stick-built homes, also known as site-built homes, are constructed on-site using traditional home-building techniques. Stick-built homes typically take around nine months to build and weather delays can impede the process. Alternatively, modular homes are constructed off-site in a controlled factory. They are made with the same materials as traditional homes and follow the same building codes. Modular builders produce a series of home segments called “modules,” which are assembled at the site. Because the modules are built in a controlled environment, the entire process can be completed up to 50% faster than traditional construction projects. Appreciation refers to an increase in a home’s monetary value. Depreciation refers to a decrease. Modular homes appreciate and depreciate similarly to traditional homes. The current rate of home appreciation is 14.5% year over year. However, this increase in value doesn’t happen on its own; homes are constantly depreciating without regular maintenance or renovation. The current state of the housing market and the general look and feel of your home are two of the main factors that will affect the value of your modular home. The housing market constantly fluctuates between a buyer’s market and a seller’s market. In a buyer’s market, plenty of homes are for sale, but few people are interested in buying a new home. This causes prices to decrease and homes often remain on the market longer. In a seller’s market, plenty of buyers are looking for a new home but few homes are for sale. This leads to competition among buyers, who will often spend more for a home than they would under different market conditions. The current state of the market influences the value of your modular home. In a seller’s market, your home will often maintain its high value. However, if the market shifts to a buyer’s market, your home may lose value as prospective buyers become less willing to pay your asking price. Maintaining and making necessary repairs on your home can help its value grow over time. If you let your home slowly fall into disrepair, it will be difficult to keep its value from depreciating. Renovations can also increase your home’s value. You can remodel your kitchen, install energy-efficient windows, or replace your HVAC system, which can make your home more comfortable. If you plan to sell, keeping your home updated can increase its appeal to buyers and raise the perceived value. Remember, the value of your home is only as much as buyers are willing to pay. While modular homes and stick-built homes appreciate and depreciate similarly, modular construction has several advantages that may lead to higher long-term value. Modular homes are constructed in a controlled environment, which eliminates the risk of high levels of moisture getting trapped in the materials. Modular homes are often longer-lasting than traditional homes. The longer your home’s expected life is, the higher its value and the better your return on investment. A well-maintained modular Accessory Dwelling Unit (ADU) can bring in as high as 15x return on your investment over a 30-year period between gross rental income and property value increases. Modular ADUs increase your property value and can become a steady source of additional income. At Modal, we design affordable ADUs that are better for the planet too. When you purchase an ADU from Modal, we take care of the required permits, paperwork, site surveying, construction, delivery, and installation. We want to simplify the process as much as possible so that you can live without the extra stress. ADU laws vary by state and county, so it’s essential to know whether they are permitted in your area. Click here to get started.
Modular Versus Stick Build Homes
How Homes Appreciate and Depreciate
How the Housing Market Affects Your Home's Value
How Maintenance Affects Your Home's Value
Benefits of a Modular Home
Shop Prefab ADUs at Modal
FAQs
Do Modular Homes Hold Their Value? ›
Yes, modular homes are often a very good investment! Unlike mobile homes, which tend to depreciate with time, modular homes hold their value or even increase with time.
What are four drawbacks of modular homes? ›Of course, modular houses have their downsides. These include less customization capabilities than stick-built homes. The cost of the land and construction of the home may be higher than some people can afford, land restrictions, and perceive quality issues. Modular homes may also have more a complicated loan process.
Are modular homes worth the investment? ›Without a doubt, modular homes are an excellent investment. Unlike mobile homes, modular homes hold their value and don't depreciate with time. In most cases, modular homes even gain value; the resale value of modular homes is usually higher than their initial purchase price.
Is it cheaper to build or buy modular? ›Is it cheaper to buy a modular home or build? In most cases, modular homes are less expensive than building a house, mainly because there's less labor involved.
Are manufactured homes a good resale? ›Do Manufactured Homes Hold Their Value? Current manufactured homes may depreciate less than older generations of manufactured or mobile homes, but they may not appreciate as much as traditional single-family homes. Their classification as “personal property” may impact their value.
Do prefab homes build equity? ›Like traditional, site-built homes, modular homes have values that tend to go up or down right along with the rest of the housing market. In other words, you can build equity in your modular home just like you would with an on-site house.
What is the life span of a modular home? ›The short answer is that modular homes can last just as long as traditional site-built homes, if not longer. In fact, many modular homes come with warranties of up to 50 years. The key to a modular home's longevity lies in its construction process and the materials used.
Why don't people buy modular homes? ›Why shouldn't you buy a modular home? Modular home buyers aren't for everybody. While they're trendy right now, some people prefer a traditional home build. It's also important to note that once you've built a modular home, it's more difficult to customize or make additions after you've started the build.
What is the difference between modular and manufactured homes? ›Modular homes are assembled on a site and anchored to a foundation, whereas a manufactured home is transported in one piece to a site and can be relocated. Because they can be moved, manufactured homes are considered chattel (personal property) — like a recreational vehicle.
Are modular homes safe in a tornado? ›These structures are made inside factories, so the materials that go into your home reside in a controlled environment with little moisture. Modular homes are built to be safe in case of a tornado or storm, and inspectors check surfaces for structural soundness before shipping.
What are the cons of a modular home? ›
Modular homes have limitations in terms of customization and design flexibility compared to traditional homes. Financing options for modular homes may be more limited and interest rates may be higher. Resale value of modular homes may be lower compared to traditional homes.
Why do modular homes lose value? ›The current state of the market influences the value of your modular home. In a seller's market, your home will often maintain its high value. However, if the market shifts to a buyer's market, your home may lose value as prospective buyers become less willing to pay your asking price.
Are modular homes well insulated? ›Modular homes are well-insulated, tightly built, and because they are customizable, can be built using energy-efficient options. Heat efficiency is one of the many benefits of going modular, which is exciting news.
How much do most modular homes cost? ›Custom Design Prefabricated Home Prices. Custom modular home prices range from $100 to $250 per square foot. Prices are $200,000 to $500,000 when including all site-work, installation, and finishing. Most modular builders will customize their existing designs to change the finishes, floor plan, or the home's size.
Which is better, stick-built or modular? ›In general, though, there is no difference in a modular home value vs. stick-built. Both stick-built and modular homes are made to last and tend to appreciate value over time. This means, if you ever decide to move, you may be able to sell your home for more than you paid for.
How to tell if a house is stick-built or modular? ›If it is a metal frame, it is likely that metal is the old chassis of the home and it is a “manufactured home.” If the frame is wood and lines can be seen where the sections of the home join up (doubled up joists bolted together), then it is likely a “modular home.”
What increases the value of a manufactured home? ›Low-Cost Upgrades and Interior Finishes
Consider upgrading your appliances to increase the comfort level in your home as well as the energy efficiency. Other ideas for low-cost upgrades include a fresh coat of paint on interior walls, high-end bathroom fixtures like faucets and showerheads, and stylish light fixtures.
No matter what type of manufactured home you live in, it is not a safe place to take shelter during a severe weath- er event. MOVE TO A SAFER STRUCTURE. Single family homes are safer, but not completely safe.
What is the difference between a modular and manufactured home? ›Modular and manufactured homes are prefabricated structures, meaning they are partially or fully constructed in an off-site factory. The primary difference between modular and manufactured homes is that modular homes are held to the same local, state and regional building codes required for on-site homes.
Is a double wide the same as a manufactured home? ›Eligible manufactured homes will be considered “double wide” will be no less than 20 feet in width and have no less than 600 square feet of living space inside. Some people think of a “double wide” and think it must be at least 16 feet wide, but the industry marker is actually just 12 feet.
What is the downside of modular? ›
Disadvantages of Modular Architecture: Increased complexity: Breaking a system into smaller parts can make it more complex and difficult to understand for new developers. Higher cost: Modular architecture can be more expensive, as it requires more time and resources to design and implement.
What are the risks of modular housing? ›One of the primary risks associated with modular construction is transportation. Modules are often damaged during transportation due to accidents, poor weather conditions or improper handling.
What are modular designs not good for? ›However, the greatest disadvantage of having a modular design for electronics has a lot to do with the limited number of configurations. Several parameters that need alteration get fixed by default and cannot be changed. This, in turn, reduces their efficiency.