Some Thoughts About System-Built Housing In The West

Implications: The difference in the product in today’s housing market in high volume states such as Arizona, California and Nevada is a matter of delivery and the local labor pool and the state of assembly when the structure is delivered to the building site.  Stick-Built production housing in major markets is a product of factory built trusses, pre-cut lumber packages and prefab cabinets delivered to the site for finish and assembly work whereas system-built is limited to less assembly and finish work once the unit is dropped on the slab.  Whether the merchant is a production builder or a factory builder, they both make money by sticking to a limited number of models which they have learned to deliver within a budget and a schedule. 

The distinctions I note are that the exterior elevations and the interior finishes of the system-built home are plainer.  Vinyl siding, asphalt shingle roofing and basic grade doors key the exteriors. Interior cabinetry, appliances and fixtures are low budget items.  The stick-built homes I see in model compounds are more the product of design center upgrades with higher end add-ons.  The stick-built is almost universal for the major and city markets while the system-built is most observable in rural county-governed areas.

Analysis:

We did a road trip last weekend to Southern and Southeastern Arizona.  Think towns like Sierra Vista, Tombstone, Bisbee, Douglas, Nogales and Patagonia.  The economy here is mostly low density ranching, some mining, government services, the military, limited Native American enterprise, border patrol, tourism and retirement.  Think a triangle with Tucson at the apex and Douglas and Nogales providing the terminus point at a base along the Mexican border.  The trip takes about six hours to drive between the towns.  The topography varies from relatively flat to craggy in the western sense with a lot of Arizona Highways type scenery.  The relatively flat county areas were studded with system-built homes on acreage complete with remote windmill operating the well.  The lack of enough volume prevents the production builders from training a labor pool to erect their structures while system-built assembly teams roam to pour slabs and drop their product in place.  The land development function of the stick-built builder is not a requirement as there is no need in these areas for production lots.  There are generally no NIMBY’s present.  Just go into the County and get your permit to erect/build.  You are mostly during this trip never out of site of such a house or concentration of houses from the main highway for more than say ten minutes at 65 MPH.

The real king of the system-built is in Yuma in the Southwestern part of the state. This product is endless there.  Northern Arizona is more topographically challenging which inhibits system-built except for Mohave County in the Northwestern part of the state.  California and Nevada have their own concentrations of the product too.

System-built is mostly out of the eye of the press since the main activity sites are far from the urban papers.  Obviously something good is going on here which meets the needs of a significant market.  This seems like it’s worth thinking more about.