Photo / Maureen Milliken
Jon Mercier, of Maine Source Homes and Realty, in one of the company's model modular house in Auburn.
January 14, 2020
Auburn firm riding rising manufactured housing wave
Photo / Maureen Milliken
The model modular house at Maine Source Homes and Realty's office on Minot Avenue in Auburn.
By Maureen Milliken
Jon Mercier got started in the real estate business in 2007, which, given what was going on with the economy and, specifically, the housing market, may not seem like the best time.
But Mercier said it was the perfect time. "For me, it was really good. There was no easy deal, a lot of short sales, other issues. I learned how to do it the hard hard way."
Now he's designated broker at Maine Source Homes & Realty in Auburn, one of the few full-service real estate firms in the state that also sells modular homes. Another one, SG Realty of Maine, a division of Schiavi Homes in Oxford, opened in Presque Isle in November.
Mercier said being a real estate broker and selling manufactured homes go hand in hand.
"We're helping people find a home," he said. And with the state's low inventory of houses and the expense of new housing and construction, the business is catching on. Maine Source sold 20 manufactured homes last year and is getting referrals from other brokers of clients looking for affordable homes.
Mercier said as home buyers find it increasingly difficult in Maine to find a house they can afford, and explore their options, the stigma associated with modular and other manufactured homes is easing.
"We're seeing a lot of buyers, particularly in the Portland area, who can't afford a home and are looking at manufactured housing," he said. The industry is benefiting. "It's as strong as it's ever been."
Affordable housing getting easier
The option for homebuyers may become even more appealing with proposed new Housing and Urban Development rules that would ease regulations for mobile homes, like the modular homes Maine Source specializes in, also manufactured housing.
According to the HUD Manufactured Housing Act of 2019, which is in U.S. Senate Committee, there are nearly 22 million people in the U.S. living in manufactured homes, and they're the biggest source of non-subsidized affordable housing in the country. In Maine, 8.9% of homeowners live in manufactured housing, according to the U.S. Census.
"Manufactured homes can open the door to homeownership for millions of families; they can appreciate in value and be an effective long-term affordable housing solution for some families and communities across the United States," the bill says.
Mobile homes are federally regulated by HUD; modular homes, which Maine Source specializes in, are regulated by the same state building codes governing stick-built houses. While they are in different government regulatory categories, they often are in the same category when buyers are looking for homes, industry officials say.
Much of the difference between mobile homes — which are now officially referred to as manufactured housing — and modular homes, has to do with the foundation. Mobile manufactured homes are on a slab, with steel underpinnings. Modular homes have foundations and, in the case of those Maine Source sells, basements.
Mercier said modular homes are losing much of of the same stigma attached to them that mobile homes have — the false assumption that they're cheesy or cheap construction.
"They look like any other house," said Mercier, as he stands in the 28-by-56 foot three-bedroom house at the company's Minot Avenue headquarters. It has three bedrooms, two bathrooms, a full kitchen, standard appliances and soothing green walls, and looks like any ranch-style home in Maine.
Saving time and money
Maine Source's homes are supplied by KBS Builders in Oxford, as well as two Pennsylvania companies. The houses are pre-built, then moved to the site, where they are put together by Maine Source, which employs carpenters and other contractors to do the work. Sometimes potential owners have land, sometimes Maine Source helps them find land for the new home.
Mercier said one of the biggest differences between buying a modular home and having one built from the ground up is time — it takes two or three months to complete one, and construction happens year-round.
Another benefit is cost. According to manufacturedhomes.com, the average starting price range for constructing a new manufactured or modular home is $55 to $75 a square foot, which would be $117,000 for a 1,800-square-foot prefabricated home, including land and necessary site improvements. According to home-builders.promatcher.com, the average cost of new construction in Maine ranges from $115 to $171 a square foot, more than twice the cost of a manufactured home.
That same consideration is what's driving affordable housing initiatives across the state to consider modular houses in their projects.
In York County, the Kennebunkport Housing Heritage Trust plans to construct up to six modular homes on town land. The nonprofit is also using homes built by KBS. Those behind the project said the lower cost and quick turnaround of modular homes make the plan doable.
Photo / Maureen Milliken
Maine Source Homes and Realty recently moved into new, more visible, quarters on Minot Avenue in Auburn. The company's model manufactured home is at rear.
Change of address, but not philosophy
Maine Source was founded by Bill Turner in 1972, and until 2012, the brokerage and manufactured home businesses were separate. The company decided in 2012 that what they offered is unique, and they should emphasize it, and the two elements were combined.
Maine Source bought a building at 259 Minot Ave., moving in late last year, for better visibility and access for customers, but is still keeping the business manageable, Mercier said.
Besides Mercier, the firm has six brokers and agents. "We're small, we're trying to do the right thing by our customers," he said. "Buying a home is a huge life transition, and [buyers] want someone who's invested in the process."
Maine Source goes over a buyers' situation, their options "and we come up with a game plan," he said. "We're with people for six or eight months."
They also work with MaineHousing and the Veterans Administration on programs that help first-time, low-income and veteran buyers find homes.
Mercier said there's plenty of room in Maine's housing market for more brokers who also building modular and manufactured homes. "There's a housing crisis, and people need homes," he said. "That's the bottom line."
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