Settling the debate: Do prefab homes appreciate in value?

The question of whether prefab homes appreciate in value is a tricky one because it depends, by and large, on the people's perception. Many people have long held the belief that stick-built homes are superior while prefab homes are inferior; this, however, is simply untrue. One of the most common misconceptions we see is the notion that prefab homes are cheap, and while prefab homes are usually lower in price, the same does not go for their quality.

Prefab Quality

The quality of a prefab home is equivalent to that of a stick-built home. In fact, many prefab home sellers make their homes to the same, if not harsher, stick-built home standards as the state/country they are sold in. The factory environment where prefab houses are created allows for controlled and precise creation, raising quality compared to stick-built homes, which are done on-site by multiple different people in a less controlled environment. Stick-built homes also have to withstand weather conditions while being constructed due to the time they take to build, while prefab homes come together much faster. 

Contractors are Key

It's also important to keep in mind that the quality of a constructed prefab home heavily depends on the contractor(s) assembling the home. An experienced and reputable contractor is a must, as inferior contractors will cause multiple problems down the road. This is because prefab home parts, which are precisely manufactured and monitored in a factory, leave the build quality to your contractor to determine as he assembles them. In fact, the quality of work done by the contractor can correlate directly to the quality of the prefab home and later on influence its resale value.

The Codes Match Up

People don’t realize prefabricated homes are all built according to the local home construction code, which helps continue negative misconceptions. One of the first things we at PMHI do when receiving plans or customized home kit orders is to make sure everything is up to code in the location you'd like your prefab home, while also getting the features customers desire.

Location, Location, Location!

Prefab home location is arguably one of the most important factors when it comes to discussing appreciation and depreciation in prefab homes. The location of your prefab home determines the home construction code, the value of the land it's on, either by proximity or directly, the ground/foundation where your prefab home is, and local views on prefab homes, which are linked to resale value as well. All of this goes to show that the matter of prefab homes losing or gaining value is not cut and dry; it's a complex issue that any home, prefab or traditionally built, would encounter. As a matter of fact, all of the factors we've discussed have to do with one big idea: people's perceptions of prefab homes.

The Public Perception

PMHI operates in California, where prefab homes are fairly standard and public perception recognizes them as regular houses, like any other. If we were to, however, travel to parts of other states, you might find that public perception differs and the people there may not recognize a prefab home as a proper house. All of this to say, the people's perceptions are the most important part and determine whether your prefab home will rise, sink, or remain the same in value. In North America, people's perceptions of prefab homes are still changing, and while they might be great in one part of the country, they might also be terrible in another, which is why it's important to be able to raise resale value through other means.

Increasing Resale Value

There are many ways to increase the resale value of your prefab home. For example, a well-maintained prefab home is much more likely to increase in value; house painting, gardening, landscaping, and other improvements on the outside of the house will also help increase value. You can also make improvements inside the house for more cosmetic areas like kitchen countertops, window curtains, living room furniture, decorations, and other easily changeable furnishings.

Conclusion

In a nutshell, prefab homes, just like all homes, are susceptible to appreciation or deprecation based on a large number of factors and, most importantly, people's perceptions. This also disproves the popular theory that all prefab homes depreciate in value. Luckily, there are multiple steps you can take to differ perceptions and increase value through maintenance, outdoor improvements, and indoor furnishings. So settling the debate, we find that prefab homes do appreciate in value, like any home, under the right conditions.