 Canadian
RTM Builders have verified
Customer acceptance of RTM Homes in Montana and
North Dakota. While these two states are currently the primary US
market, RTM Homes have also been delivered to Minnesota, South Dakota,
and Wyoming.
Regional
US based RTM Builders would increase RTM Home market penetration.
This would occur by taking market share from the higher end
of the modular home market as well as from home builders in areas
where new home demand exceeds local production capacity.
Market
Analysis using two different sets of assumptions indicates 300 homes
a year to be the RTM Home Market Potential for
a combined Montana, North Dakota, South Dakota, and Wyoming market
area. However historically RTM Builders gain market share from both
the modular home market as well as the contractor or site-built
market.
<
Click underlined text for Market Analysis used for Assumptions >
Gains
from the site-built market are significant if RTM Homes can be delivered
to markets were demand exceeds availability. This
is the situation for RTM Builders located in Saskatoon Saskatchewan
who are now delivering their RTM Homes 500 plus miles to Fort McMurray
Alberta where an acute housing shortage exists.
Strategically
located regional RTM Builders should also expect to benefit by
serving areas in Montana, North Dakota, South Dakota, and Wyoming
where a strong demand for new homes currently exists.
An
RTM Home Market Potential of 400 units annually is a reasonable
assumption when consideration is given to modular
home sales, site-built sales, and the fact that a number of urban
areas in these states have a shortage of home builders. This assumption
also recognizes that geographical conditions will make some areas
with a high demand for new homes inaccessible for RTM Homes.
The
400 RTM Homes a year assumption
also does not factor in two other variables. First, demand
created by marketing super energy efficient RTM Homes built with
Enviro System®. Second, limited time demand
created by development of major resource projects like Coal Fields
in eastern Montana.
< For more
on potential limited time demand click Coal
Power >
50
RTM Homes a year per RTM Builder location is a very manageable
production number that has been achieved by some Canadian RTM Builders,
however most do less. Based on this optimum figure, 8 separate RTM
Builder locations would be required to service the combined Montana,
North Dakota, South Dakota, and Wyoming market.
Information
from the Montana Department of Commerce indicates the average
value of a double wide modular home in 2002 was $58,700. Current
sales information seems to indicate a somewhat higher figure that
is in the range of $80,000 to $100,000. This figure excludes property
costs such as raw land and necessary services as well as foundation
or related set-up costs, as is the case with RTM Homes.
A
reasonable average RTM Home price would also be $100,000
based on modular home data and RTM Home information provided by
a small Minot ND RTM Builder. The average price for Canadian built
RTM Homes built for the US market is usually in excess of $100,000
because they are primarily higher end homes due to moving costs
and the other logistics of purchasing a home out-of-country.
Yearly
sales of $40 million should be achievable by regional RTM
Builders based on an RTM Home Market Potential of 400 units annually
sold at an average selling price of $100,000. This would result
in annual sales of $5,000,000 for each of the 8 required regional
RTM Builder locations.
Dollar
Figures revised December 8, 2004
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