It's a buyer's market for real estate. But a buyer's market doesn't make it any cheaper, easier or faster to build a home. As construction costs escalate and building codes become more complex, it's harder to keep up.

And what about the strain on you and your family? You have to be project manager, design lead, financial coordinator, and people manager ... all harder if you're trying to do it remotely; all harder if you don't know much about building homes.

Recently I took notice of an emerging solution: homes built on a factory floor rather than on site. Such factory-built homes offer many advantages over traditional site "stick-built" homes. Negative stereotypes aside, I was surprised to find out factory-built homes are coming into their own and coming to have the style and quality most of us seek. What's more, the advantages all play into today's fast-paced real estate markets.

Anyone driving along a typical rural interstate highway has probably seen lots full of new manufactured homes. No longer simple 1950s and '60s-style aluminum boxes, these newer units look like log cabins, modified craftsman bungalows, Cape Cods or stylish ranch homes. Most have abandoned the highway-lane footprint and can be joined together into something looking most “un-tow able” down a highway.

Sticker prices start in the mid $20,000s and quickly ramp upward.

These are manufactured homes. Once called "mobile" homes, the industry has worked hard to shed the negative stereotype. They don't use the term "mobile" anymore, and anyone in the industry will scowl and quickly correct if the wrong "M-word" slips out.

These manufactured homes look a lot nicer than they once did. Indeed, you can fit two or three modules together to build a very nice place for somewhere between $100,000 and $200,000, usually under $100 per square foot.

But there is another player in the factory-built home market, the fastest growing segment that anyone aspiring for a new home should know about -- the modular home.

Not in trailer parks

Modular homes are factory-built of wood and site-built components, but designed to be assembled as individual rooms, or modules, on site. They are built of top-of-the-line building materials. While manufactured homes conform only to minimal federal guidelines, modular homes must conform to all applicable state and local building codes in the location they're designed for.

Modular homes are designed to look no different than traditional site-built homes. Most are built from standard plans but can be customized to meet your needs -- adding rooms, changing rooflines, adding garages or changing exterior treatments. They are fully acceptable -- and accepted -- in most communities, subject to the specific regulations of that community.

They are built better than many site-built homes to withstand the rigors of transport, and they aren't subject to rain and other local weather conditions during construction. And they can be fully funded by traditional mortgages. Notably, some are quite upscale in appearance.

And if you use the term "manufactured" around someone in the modular-home industry, they'll bristle too. Modular homes are built on a factory floor but that is about all that they have in common with manufactured homes, as industry professionals are quick to point out.

I needed a helping hand to figure out what was really going on in this business, so I spoke to Isaac Lassiter, general manager of Cutting Edge Homes, a California modular-home vendor. He gave me numerous pointers on how modular homes work, where they make the most sense and the state of the market today.

Problems solved

Whether you're currently in the home market or just thinking about it some day, here's where modular homes help most:

• Expensive markets. Lassiter was quick to tell me that saving money isn't automatic. If you build a modular home in a remote area or inexpensive market, labor savings may be eaten up by transport costs. But if you're looking at a midrange or high-end market, for example Orange County, Calif., expect to save $15 to $20 per foot. That's a lot.
• Remote construction. Building a vacation or retirement home? Or planning a move? A modular home will save trouble planning the details. You don't cede too much control to the contractor and you won't face finding so many scarce subcontractors.
• Need it fast? Perhaps one of the biggest advantages is that you can build fast. The design phase is simple and typically a project will take 6 months to 7 months until move-in versus more than a year for a "stick-built" home. This advantage is especially important in areas with short building seasons.
• Reduced stress. Look at it this way. If you had to assemble a computer from basic electronic components and wires, you'd go nuts. That industry, and many others, went modular long ago. Now, homes come in modules, too, and you can focus on the big picture without worrying about how the little pieces go together.

Caveats

Not surprisingly, there are a issues. While some states, notably California and many western states, have fully adopted modular construction, some states and localities lag. California has created blanket standards and requirements for modular homes, and all local codes must adopt them. Manufacturers build specifically for these state codes.

Other states, notably in the Midwest and South, aren't as far along and you may have some trouble getting local approval. Check with your dealer and local authorities before going too far.

Also, watch transportation costs, which can run $10 to $12 per square foot. This can wipe out much of the savings. But as Lassiter points out, more and more factories are coming on line, so the distance between factory and home site will become less.

And you might find that some contractors can't -- or don't want to -- work with them. But modular homes are competition, aren't they? Some forward-looking contractors have begun to specialize in modular-home assembly, but they're still hard to find.

Why haven't we seen more

My first question was: "If this is such a good idea, why haven't we seen more modular homes?" Several answers were given:

• Visibility. It's a relatively new business and most people don't understand modular homes. And many still associate them with "trailers" and "mobile homes." Dealers are fragmented and haven't created a very clear message yet. People don't know where to buy one and contractors, for reasons suggested above, aren't quick to recommend them. Most are marketed today through the Internet and, so far, it has every trait of a niche market.

Wave of the future

Warren Buffett made a much-reviewed investment in manufactured- and modular-home builder Clayton Homes. No doubt Buffett saw the long-term wisdom of delivering affordable housing for all markets. Now I see the wisdom, too. But I also see why modular homes might be hard to understand.

I suggest a look at the at the Modular Building Systems Association Web site (www.modularhousing.com) for general info. Or, just Google "modular homes" followed by the state you might build in.

I asked where the industry has seen the strongest demand for modular homes. "It isn't at the low end; it's in the higher end of the market, where wealthy people are smart with money. They like the quality, the speed and the price." That says a lot.

Jennifer Openshaw, host of Winning Advice on ABC Radio, is author of the upcoming book, The Millionaire Zone (Hyperion, 2007). She is also CEO of Openshaw's Family Financial Network. Visit her at www.winningadvice.com