The
following information is a Market Analysis Overview of
the RTM Home Market Potential for new RTM Builders based on the
current modular home market in Montana, North Dakota, South Dakota,
and Wyoming.
RTM
Homes provide a viable alternative for Customers purchasing
higher end modular homes. It is these Customers who create the greatest
potential market for regional RTM Builders established in Montana,
North Dakota, South Dakota, or Wyoming.
Customers
typically buy modular homes for two reasons. One
reason is geographical, or the lack of a viable new home building
alternative due to where they live. The other reason is financial,
or is a lower purchase price for a modular home combined with ease
of financing.
Statistics from the Manufactured Home Institute quantify
the market size and qualify it by distinguishing sales numbers
between single and double wides:
| Montana |
700 units |
500 double wides or 71.5 % of total |
| Wyoming |
600 units |
500 double wides or 83 % of total |
| North Dakota |
500 units |
300 double wides or 60 % of total |
| South
Dakota |
900 units |
700 double wides or 78 % of total |
In poorer states like Mississippi and Arkansas these
statistics show that double wide sales as a percentage of the total
sales numbers tends to be lower. This suggests people in those
regions are purchasing modular homes more due to lower price and
ease of financing than due to lack of viable alternatives. The
reason for the North Dakota double wide percentage being lower
is likely
due to two reasons:
- Canadian RTM Builders who, combined, are now
likely providing 50 plus RTM Homes annually
- More construction of site-built new homes in
counties near major urban centers, something indicated in statistics
provided by the North Dakota Home Builders Association
US Census Bureau data indicates
the modular home market is declining with
overall production dropping 7.5% from 2002 to 2003. This
is almost twice the decline of 4% for new single family homes
in that same time period. Lower interest rates for new home
buyers are a probable cause for this because they make Real
New Homes a more viable option.
RTM
Market Potential of 270 RTM Homes annually would
be achieved by taking only 10% of the modular home double wide market
in the states of Montana, North Dakota, South Dakota, and Wyoming.
To service this market would require 6 regional RTM Builders each
producing about 45 new RTM Homes annually.
This RTM Home Market Potential
Assumption should be achievable based on experience
in the Saskatchewan market where the modular home industry became
virtually non-existent as the RTM Home market evolved.
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