A (0:03)

For over 20 years, until the end of the 1920s, the American Catalog home boomed and busted. The whole business model was fascinating. Flip through this wonderfully illustrated catalog from Sears or Aladdin, find a house and then buy. Then they shipped you the house. Your house is now in the mail. How did this industry suddenly explode into being and what eventually ended it? In this video let us dive into the rise and fall of the kit houses in the catalogs. This video is brought to you by the asianometry Patreon. Before people bought entire houses by mail order, they first bought house plans by mail order. Just as it is today. Planning and designing a house in the 1800s was a tedious affair. Popular books and catalogs helped introduce architects and clients and to interesting architectural Trends. In the 1840s, we had pattern books where architects shared cool design bits like drawings, floor plans and construction details for housing elements like doors, chimneys and windows. The books were kind of like a portfolio. Hire me, this is what I can do kind of thing. But also help popularize certain design styles. And also some talented builders can use the plans in the pattern books to build up the portrayed houses. Though in these early days it didn't seem to be the book's core intention. The idea took another step forward in the late 1850s when a firm called Cleveland Brothers, confusingly based in New York City rather than Cleveland, published a book called Village and Farm Cottages. Their book included a notice saying that a reader can buy any of the shown designs, complete lithographied working drawings and print specifications for between three to five dollars each. A competent worker can then read the plans to produce the house. This idea took off in part thanks to new mass publication technologies that can accurately reproduce detailed blueprints en masse. Other architects started publishing house plan catalogs that customers can peruse and order via mail. Customers can even request small changes to the plans to be made well known. Architects doing this include George Palliser, Robert Schople, and George F. Barbour. In 1906, William Joseph Sovereign heard from his brother Otto Egbert Sovereign about an acquaintance's growing business. The acquaintance had started selling knock down boats via mail, meaning that the seller pre cut the boat's lumber and then mails it to the customers who puts the thing together themselves. That boat business did well enough to spawn competitors. William was a non practicing lawyer and Otto had taken a course in advertising. Despite neither having any home building experience, the two decided to sell knock down houses in the same way and found it a business to do it. This story origin story is widely told, and it's probably true. However, the company's early selling materials also tell of an alternate origin story where William Sovereign walks around New York City and is inspired to apply modern methods of steel and concrete to ordinary housing. Anyway, they crafted a small catalog showcasing summer cottages, dwellings, boathouses and auto garages. Their tagline was anyone who can drive a nail can put together an Aladdin house. The name Aladdin, of course, is meant to evoke the speed with which their houses can be produced. The homes were always called that, but the company itself was called North American Construction Company until 1918 when it became Aladdin Company. Aladdin reached potential customers by taking out adverts in popular national magazines like the Saturday Evening Post or the Farm Journal. You see the advert and then write to receive the catalog. The first catalog in 1906 was a small eight page endeavor. Their first order was a $298 summer cottage ordered by Alfred Perrin, a dentist in New York City. But the idea took off and business quickly flowed in. Aladdin's catalogs were beautifully illustrated, well written and tightly organized. The key messaging emphasized their home's high quality and substantial time and money savings for the buyer. In those days, half of a house's cost was the lumber. So Aladdin claim that their Aladdin system of pre cut homes wasted far less material, 2% compared to the 18% with traditional builds. With the savings passed on to the customer. Moreover, they talked up how their detailed instructions and pre cut parts meant that their ready cut homes took less time to make, saving money and labor. The catalogs also exhibit broad product range. Aladdin's 1911 catalog had 47 houses and two garages. The 1915 catalog had 101 houses, 18 summer cottages and five garages with a plethora of optional add on features. To produce the houses, the brothers contracted with local lumber mills for the first eight years of business. Aladdin Holmes never owned any lumber saws, woodworking machines, whatever. When an order came in, they would send over to the mill a lumber list and cutting instructions. Why am I reminded of dropshipping? This only changed when the mills started demanding a cut of revenue. Aladdin then set up their own mills. Their former wood partners thus started their own mail order house businesses too. In the 1900s, eight catalog home companies competed in the market, including Pacific Homes and Bennett Homes, many serving a local region. So Sears, Roebuck & Co. Was not the first company to enter the mail order home business. But they were by far the most famous. Sears began when Richard Sears, then a railroad station agent bought a bunch of watches from a local jeweler who had refused a shipment. Richard resold them for a tidy profit. Sears then moved to Chicago, where he partnered with a watchmaker named Alva Roebuck to start Sears and Roebuck. The duo then started selling watches and jewelry via mail order catalog. By 1894, the Sears catalog was 322 pages long and listed everything from syringes to refrigerators to washing machines. In 1895, Sears started listing bill building materials in their catalog, too. It's not clear whether that venture was successful. Sources differ, but it remained unchanged until 1906, when Sears reassigned the manager of the China department, Frank Kushel, to run it. Kushel thought that Sears was losing money storing the heavy construction materials and decided to try sending them directly from the factory to the customer. Voila. Buying Homes via Catalog an alternate, perhaps more accurate origin story, according to at least one source, was that he heard about Aladdin Holmes success and was inspired to do the same. Sears first home catalog was its book of Modern Homes and Building plans, published in 1908. It included 22 different home plans priced between $650 and $2500. Customers got both blueprints and the raw construction materials. Sears also helped estimate the cost of other work items like excavation and construction. This first book leaned heavily on the Sears name and was filled with classic marketing language like build now as prices are greatly reduced or our plans are more complete and simple than you can get from ordinary architects. Later, in 1911, Sears turned the modern homes business into its own separate division. The catalog started including illustrations of the home's interior. Aladdin did it first, which was a great opportunity to cross sell furnishings from Sears retail. Like Aladdin, Sears offered a wide variety of houses ranging from bungalows to Colonial style mansions to Cape Cod cottages. There was no such thing as a typical Sears house. The design simply mimicked the popular styles of the day. Who did the styles is a difficult question to answer. Early ones were probably purchased from outside architects, but later on, Sears hired nameless and largely anonymous architects to find and draft new designs. In the late 1910s, Sears and Aladdin started giving their house designs these catchy names like the Maytown, the Glendale and the Pasadena. Based on the little data available, the catalog homes company's core target markets were middle class, aspirational families living in small, mostly Midwestern towns. For example, in 1925, Aladdin posted a list of 1,000 customers of those living in the state of Ohio. Most were in towns you've never heard of, like Mansfield 28,000 people in 1920. Steubenville. 28,500 people in 1920. Lancaster. 14,700 people in 1920. None in Cleveland, Ohio's big city. Sears wanted to dispel the preconception that prefabricated homes were shoddy or below expectations. So they worked hard to give a luxury feel via customization and a personal touch. A customer was assigned a service representative who confirmed details and provided a thick instruction manual and shipping schedule. The house then arrived via rail in separate shipments. The kit included the pre cut wood, flooring, siding, roofing, nails, hardware and other stuff. The only excluded things were brick, concrete and other heavy things due to weight, though their costs were included in the house price estimate. Once the house got there, it had to be built up and that caused tensions in the communities. Local skilled laborers didn't like how these prefabricated homes cut them out of business and essentially downgraded them to crude labor. But it was those local communities lumber supply chains who were most up in arms. Local lumber stores handled 70 to 80% of the wood going to builders. They felt that the catalog home sellers were making an end run around them by directly shipping customers pre cut pieces of lumber. Lumber store owners and mills wrote angry opinion pieces in various magazines, tried to organize boycotts and even filed lawsuits to halt this perceived evil. The pioneering mail order companies faced the same type actions back in the day, but potentially meat kettle. The American lumber industry itself was quite monopolistic too. In 1914, the US government cited the lumber industry or lumber trust for illegally coordinating to restrict wood output to maintain prices. Whoops. In 1911, Sears, finding traditional banks unwilling to issue loans for these untraditional houses, started offering customers financing of their own five year loans at a 6% interest rate. Such loans were then seen as quite generous. The financing application notably did not ask the applicant's race, gender or ethnicity, which allowed those who otherwise wouldn't be able to get financing to get a home. Aladdin never offered this option. One of their marketing points was that they only sold for cash. The most they ever offered were installment payments. But Montgomery Ward, the third place vendor, and other catalog home sellers followed Sears lead. Liberal financing no doubt helped Sears sell more homes, but it also exposed them to credit risk. And as the economic environment started to weaken and sales flagged, those loan terms would only get looser. During World War I, the catalog home companies boomed by providing governments and organizations with temporary housing. CYR sold hundreds of temporary worker houses to giant companies like Standard Oil and Bethlehem Steel, as well as Hospitals to the Red Cross. Aladdin's first big deal was in December 1914 when Dupont signed a massive gun cotton contract with the French government and bought 61 middle range cottages and bungalows for its company town of Hopewell. Aladdin's records show that over 300 companies bought and built entire towns. The job apparently inspired Aladdin to put out a special industrial catalog offering complete towns that can house up to 3,000 people. Sears of course did the same. After the war, the US entered a major housing boom. War production had paused. Residential builds and soldiers returning home after demobilization needed new homes. Easy credit sloshing about helped them finance those homes. Sears in the 1920s was already a changing company. They hired the General Robert Wood, who led the company away from the aging male catalog sales model to in person retail. In 1919 the company started opening catalog sales offices around the country to raise attention to Sears products. This in turn helped lift the sales of homes. Aladdin sales boomed during this time and they regularly kept up with the mail order colossus since years. Their annual unit sales never fell below 1000 between 1913 to 1927 and in 1926 they hit an all time peak of 3650 homes. But at the same time, the industry landscape was changing and competition was intensifying. The catalog home's biggest competitors other than themselves were the local lumber companies and their retail units. After failing to legislate or sue away the catalog home businesses, they started competing. After 1914, the Home Improvement stores changed to hit the catalog homes key benefit, the ability to sell a complete home. They expanded their product line from just lumber to also include paint, roofing, cement and more. They started stocking their own house plan books and recognizing the catalog illustration's appeal to women, they built showrooms, added displays and hired staff to make the previously shabby, very masculine lumberyards more woman friendly. One of the first companies to make this adjustment from commodity to service was Dick's Lumber Company in Boston. Their adverts from the 1920s put their finger on the key point. Customers want package options and useful service to help create their home. The home catalog companies offered that. And now the emerging home improvement store industry was too. The intensifying competition began to leech away the catalog home industry's dynamism, forcing Sears to go ever deeper into the home business. Their financing got even more generous to the point that they sold the house with no money down. They opened new dedicated factories for doors and other parts and the company spent increasingly more money doing custom architectural work in Response to requests from customers and more complicated dwellings. Then, in 1929, Sears started engaging with local contractors to directly oversee the home's construction. The presumption was that the house's pre cut wood and detailed instructions would save time, up to 40%. The business writers wrote up their concerns regarding rising labor costs, either from hiring union labor or following local hiring practices. To put it euphemistically, the modern homes business peaked that year in 1929, when the division made $12 million, half of which came from mortgage loans tied to the housing. But profit margins had substantially shrank, hovering under 5% between 1927 and 1930. Unfortunately, October 1929 saw the historic Wall street crash, the end of the American housing bubble and the start of the Great Depression. Sears home catalog business came to a screeching halt. Desperate to juice sales, the company loosened its financing terms even more. In 1930, mention of credit terms started appearing in the company's adverts. This all came back to haunt the company. In mid-1931, Sears was forced to repossess the homes of underwater buyers. In the year between September 1931 and November 1932, home repossessions exceeded that of all previous years combined. In 1932, Sears was forced to end their mortgage loan plans. They sold off the loans and the repossessed real estate to the Metropolitan Life Insurance Company. Finally, in 1936, Sears formally ended the modern homes division. Sales revenue was not bad. $2.75 million in 1938 and $3 million a year before, for instance. But profits were bad. Occasional special home catalogs were still issued, though they were mostly unchanged until 1940, when Sears sold its internal lumber plant. There was the apparent intent to keep selling houses via contract, but it never happened. Final estimates of Sears sales by closure range between 70,000 to 100,000 houses sold. They never kept records. The same fate awaited many other large companies. Catalog homes arms closure before World War II since Aladdin Company never got themselves into financing shenanigans. The company survived both the Great depression And World War II, one of the few to do so. And in the early 1950s, sales surged back to a thousand a year. But the market had changed. Post war American society was shifting away from the small towns and surrounding farming communities where the catalog and kit home companies previously made their bread and butter. Instead, American dynamism shifted to large cities and the suburbs, built up by corporations that acted like community builders. They broke up huge tracts of land into many small lots and built identical houses on them. Selling the customer Both think levittown in the 1950s. Vertical integration let the community builders build at speed and scale. However, it left no room for the catalog homes, which which presumed the prior model of American house building, where a family buys a lot and hires people out of the local community to build a house on it. And as for those who still did things the old way, 55% did so in 1949, when the stat was last collected. The catalog home business model fell to improve competition from the local home improvement stores. In the 1950s and 1960s, the Aladdin's sales ranged between 200 and 300 houses per year. In the 1970s, that fell to just 50 to 200 houses each year, then 100 to 150 after that. All still sold via mail order and telephones. There's a fascinating 1981 interview with William F. Sovereign, the original William's Son. It goes over Aladdin's struggles in the 1970s and early 1980s and when high inflation and soaring home loan interest rates really hurt them, sovereign said, we look at it as an obligation to people. People are doing this by themselves. We want to turn out the best product possible and there's a lot of junk around. This year and last are the worst ever for this company since the Depression. We had a lot of people who wanted homes but couldn't afford to finance them. By then the business had already shrank from 50 employees to just seven and unfortunately Aladdin finally closed its doors at some point in the 1980s. The exact date they did so is not entirely clear to me. Before we close, I want to thank a viewer of the channel Chet for inspiring this idea. He wrote me a very kind email and was like whatever happened to those Sears kit houses? And there we went anyway. Mail order or kit home sales never dominated the whole industry by any metric, but they were significant. Between 1905 and 1929 they in total provided maybe about 400,000 homes, or 4% of the total stock. Today, there are kit home enthusiasts that like searching for and identifying these houses, which is challenging since most have been substantially modified since their construction. In addition to the homes, the catalogs themselves remain. And honestly, the homes they illustrate are beautiful and stand as a wonderful time capsule of American days long ago. Alright everyone, that's it for tonight. Thanks for watching. Subscribe to the Channel, Sign up for the Patreon and I'll see you guys next time.