Newspaper article The Record (Bergen County, NJ)

Home Building, Piece by Piece

Newspaper article The Record (Bergen County, NJ)

Home Building, Piece by Piece

Article excerpt

Factory-built homes appear to be on the rise in North Jersey, as climate-controlled home-building factories in Pennsylvania and New York are increasingly are catering to high-end home buyers and investors in the region with customized, amenity-filled homes.

Edward Mathis, a Re/Max agent in Saddle River for 12 years, has recently come across more than a few modular homes -- also known as factory-manufactured -- being built and put on the market, a sign that homeowners and homebuilders in Bergen and Passaic counties are seeing these homes as luxurious and just as sturdy as traditional homes built on site, otherwise known as stick builts.

Mathis is the listing agent for a Westwood modular home being built by Excel Homes, based in Liverpool, Pa. Many of the modular- home factories that serve New Jersey are in Pennsylvania, Maine and New York.

In the United States, about 3 percent of homes are modulars, about 8 percent in the Northeast and 10 percent in New York/New Jersey, Mathis said.

Mathis said that when he shows the high-end Westwood home, people don't know it's modular. He said that he thinks interest will grow because there is a strong market for new homes with more amenities.

"It's really about customization and giving the client what they want," Mathis said.

Robert Caruso, managing partner and owner of Big Sky Custom Homes in Ho-Ho-Kus, has been the exclusive New Jersey builder for Westchester Modular Homes of Wingdale, N.Y., for about five years. Homebuyers, he said, can work with a design team on a 3D monitor in his studio, avoiding an outside architect and extra costs, or the company can create a design from a someone's plans.

"We're getting away from the old-school way of sitting down with a catalog and picking a house. Whereas now we're pretty much open to build almost anything you want," Caruso said.

Of course, there are caveats if you want to build a modular home.

First, you'll need buildable land, which is scarce in many North Jersey towns.

And unlike when purchasing an existing home, which would involve a conventional mortgage, putting up a new modular home -- or any new building for that matter -- requires a construction loan. Those loans are riskier, carrying higher interest rates in the 5 percent range and terms of just six or 12 months. And some lenders unfamiliar with the construction process may be unwilling to lend to modular home builders.

But once the home is complete, you can refinance the construction loan into a conventional 15-year or 30-year mortgage to bring down interest rates to around 3 percent, said Michael Sema, president of Elmwood Park-based Amber Sky Home Mortgage, which typically refurbishes existing homes to resell.

And while prospective buyers can dicker with traditional contractors or home sellers, pricing on modular homes is less flexible. Once a price is quoted, it's set, said Caruso of Big Sky Custom Homes. On the other hand, the buyer doesn't have to worry about the price of a new home going up.

"We don't have the worry of a no-show contract or material increases," Caruso said.

Cheaper per square foot

Sema is scouting modular companies to build a home for eventual sale on a lot his firm bought for $160,000 in Oakland, where the original home burned down. He plans to have the five-bedroom, four- bathroom home, with a total of 3,900 square feet of living space and a fully finished basement built for around $300,000. Through a stick- builder, this could cost around $400,000, Sema estimates. Ultimately the home will have an asking price of $749,000.

Usually, the price per square foot in construction is $100 to $150, depending on how high-end a builder is. Now, he's getting a home built for about $75 to $80 a square foot, possibly $100 depending on the finishing touches, Sema said. …

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