Laurel Creek Homes, the Newest Company to Enter Arizona's Manufactured Housing Business, Has a Recipe for Success, Even in the Worst of Times

News / Industry

Manufactured home company cites a 'flat' industry.

By Laurel Creek Homes, www.earthtimes.org - Tue, 12 Jun 2007 14:34:01 GMT

PHOENIX, June 12 /PRNewswire/ -- For the past two years, the real estate market has been heading into rough waters, with falling home values, declining home sales and mounting foreclosures, much of which is the direct result of several years' worth of easy credit and sub-prime loans.

The crisis is even more acute in the manufacturing housing sector, which has seen sales of HUD-code homes fall from 379,500 in 1998 to 135,000 in 2006. And this year isn't looking any better, thanks to poor lending practices, which enabled thousands of high-risk buyers to purchase manufactured homes.

The resulting foreclosures have led many lenders to exit the market, while prompting a corresponding contraction in manufactured housing construction as homebuilders have shuttered their plants or left the business.

So given this market scenario, why would four of Arizona's most experienced manufactured housing executives form a new manufactured housing company now, even going so far as to purchase a 243,000 square foot factory in Phoenix and hire nearly 200 employees?

The answer, said Laurel Creek Homes co-founder Bryon Blandin, lies with the fact that the current crisis in HUD code homes isn't solely a reflection of substandard lending practices. It's also a reflection, he said, of manufactured home builders' consistent failure to provide critical customer service and warranty support once their units leave the factory.

Indeed, as many manufactured home buyers have discovered, the units look great at the factory. But installing them on private property can be problematic, particularly if there's no one taking charge of the situation to ensure that the homes are being installed correctly and to the customer's satisfaction.

"Consumers have gotten tired of the finger pointing that goes on between manufacturers, manufactured home set up companies, retailers and subcontractors," Blandin said, adding, "They want someone to take responsibility for the installation of these homes and to be accountable to them for any issues that come during or after the installation process. But this is precisely where we think Laurel Creek Homes can make a difference."

Indeed, unlike many of its peers in the manufactured housing business, Laurel Creek Homes assigns field representatives to oversee the installation process. It also conducts walkthrough inspections to orient the customer to their new home and to ensure that it fully meets their expectations. It also provides effective, ongoing warranty support.

Blandin and his business partners have gained these insights from years of experience in the manufactured housing business. Most of Laurel Creek's co-founders, in fact, are former senior executives from Cavco Industries, Inc. in Phoenix.

"By taking care of our customers better than other companies in the manufactured housing business, we believe we can establish ourselves as the premier builder of manufactured homes," Blandin said. "We also think that, in time, we can win back both consumers and lenders, even in the present market environment."

And while sales of HUD homes are understandably tepid right now, Laurel Creek is already winning support from dealers and consumers as well as industry observers. This year, in fact, Laurel Creek, was ranked second in the nation behind Silvercrest Homes in Randall Easton's 2007 Factory Built Housing Report for Arizona, which evaluated 18 HUD-code manufactured and on-frame modular housing companies.

John Panzer, a financial services executive who recently purchased a Laurel Creek HUD home through Western American Home Center in Tucson, said he is impressed with his home, which has been placed on a quarter-acre site southwest of Tucson. "I would compare mine to any site built home around," he said. "It doesn't look like they have taken shortcuts with anything."

Panzer added that many features that are upgrades with other manufacturers are standard with Laurel Creek Homes.
Dealers, for their part, say they are pleased with Laurel Creek's product and follow up customer care, particularly after the homes have been installed.

"I'm finding Laurel Creek to be very refreshing," said Carol Schmidt, general sales manager for Pueblo El Mirage, a manufactured home community in El Mirage. "I'm finding that they are open to new ideas. They are open to ideas and they want to make the product better. They really do want to make them more like site-built homes. And they are doing 8-foot sidewalls, so when you walk into one of their homes, you get more of a site-built-home feeling. Another good thing is that the owners of Laurel Creek all come from other manufacturers, so they know the ups and downs and how to make the product and customer experience better."

Kathi Wiggs, general manager of Factory Expo Home Centers in Chandler, has a similar perspective. "My experience has been that their customer follow up is very good," she said, adding, "I haven't had any issues."

But even with these initial successes, Laurel Creek isn't putting all of its eggs in one basket. The company has also developed a capability to produce modular homes as well as recreational park trailers or "park models," the latter of which currently account for the majority of Laurel Creek's total sales.

Unlike manufactured homes, park models are 400-square foot vacation cottages. Technically classified as recreational vehicles, they can be installed on private property, subject to local zoning ordinances, or placed on a leased or purchased site in a campground or RV resort.
Blandin says Laurel Creek is applying the same kind of customer service philosophy to park models that it has with its HUD homes, and is winning praise from its customers and dealers alike.

"They are very accountable," said Bill Smart, 72, a retired Cortez, Colo. businessman who spends his winters in a Laurel Creek park model at Sundance RV Park in Casa Grande. "We did a walk through. We pointed out some minor things that concerned us, and within a couple of weeks a repairman took care of it. We are as happy as can be."

And while the company only recently won approval to produce modular homes in California, its first target market, Laurel Creek has already won accolades from the Manufactured Housing Institute, which recognized the company with its "Best Modular Home Concept Award" this year for homes exceeding 2,200 square feet.

And while HUD homes currently account for a small percentage of Laurel Creek's total sales, Blandin believes those figures will change in the near future as Laurel Creek's name and philosophy become better known and as financing again becomes available to buyers to manufactured and modular homes.

"We see ourselves as a sleeping giant," he said.