Despite rising interest rates, the housing market is still red hot. With the average 30-year fixed rate mortgage nearing 7%, the average homeowner will pay over double the asking price at the end of those 30 years. Sky-high housing prices and insane interest rates mean being a homeowner isn’t an option for many.
What happened: A number of new technologies and startups are looking to solve this, and one is becoming a clear frontrunner. Boxabl is a startup creating a platform for building tiny modular homes called “Casitas” that can rack and stack together to make any size home. They sell for about $60,000 per Boxabl for a semi-furnished 375-square-foot home. The kitchen comes with a fridge, oven, dishwasher and microwave while the living space has a washer, dryer, and air conditioning.
The startup has become a sensation. This is sparked in part by its record-setting equity crowdfunding raise where instead of raising strictly from venture capital, Boxabl opened investing to everyone. This resulted in raising over $130 million from tens of thousands of everyday investors, many who are sitting on substantial unrealized gains as the company has risen to a valuation of over $3.3 billion.
Another factor drawing attention is that Tesla Inc. CEO Elon Musk owns a Boxabl Casita he’s using as a guest house.
About Boxabl: Likely the main reason Boxabl is attracting attention is how quickly the company is achieving its goals. The company’s long-term goal is to build a house every minute to produce affordable housing to put more Americans in homes and reduce homelessness. The homes can be towed by most trucks or SUVs and unpacked and set up in about an hour. When the company is caught up on its waitlist, anyone will be able to buy a home and have it set up almost immediately. Because they can be stacked, you could put six Casitas together and build a 2,250-square-foot home in one day.
The $60,000 price tag doesn’t include shipping costs or the expense of the crane needed to stack them, but the feat is still impressive.
Home prices around the world vary greatly, so while some areas might pay a premium, others would see significant cost savings. For example, the average price of a home in California hit $831,000 in 2022. The average size of a home in the Golden State is about 2,350 square feet, and it’s 1,600 square feet in San Francisco, meaning a Boxabl home would be 70% less expensive in some areas of the state.
Boxabl production goals: Currently, Boxabl has a waitlist of over 160,000 members with at least 4,000 paid deposits.
In a recent interview, Boxabl Co-Founder Paolo Tiramani noted the company is producing a new house every four hours but has ordered new equipment so it can shorten the time to one per hour. The end goal is a new house every minute, similar to production lines at automobile factories.
Boxabl is producing roughly 2,200 homes a year and plans to ramp up to about 8,000 per year soon. Boxabl began delivering its first structures in the U.S. government’s $10 million in 2021 but received negative press due to some faulty setup from people on the ground at the government’s setup site.
Boxabl said it produced about two homes per day during its first months of operation. While the ramp-up has been gradual, demand has exploded, so it could take a few years before the company delivers homes to everyone who’s paid a deposit.
The delay has resulted in some backlash from people on the waitlist who want their homes sooner, according to an article by Business Insider. After the article was published, Boxabl CEO Galiano Tiramani indirectly referenced it in a recent tweet, “An important milestone for @boxabl to become so relevant that people are trying to hijack our buzz for their own purposes.”
Like any new startup, setbacks and controversy are expected, and where Boxabl will end up is anyone’s guess. But it’s clear America’s housing and homelessness issues are on the rise and the country is in need of a solution.