The Profit

Tiny home sales are booming, why that might not be good for business

When it comes to the tiny home market, the question isn't why someone would want a tiny home, but who's going to build it. That's according to CEO Steve Weissmann of Tumbleweed Tiny Houses who receives more than 2,000 inquiries per month about this burgeoning market.

Weissmann was first introduced to tiny homes when he started downsizing his life in 2002. "I was living in one that was about 400 square feet. And I heard about somebody who had this tiny house on wheels that I had to see. ... And I instantly fell in love with it," he said.

But a lot has changed since then.

With all the recent exposure on TV, websites and social media, the tiny house industry has become a total buyers' market. The majority of those buyers, Weissmann indicates, are aged 35-55 and mostly female. Generally speaking, tiny homes range from 100 to 500 square feet with a median list price of $119,000. And no matter the size, it's hard to argue with that price.

And it isn't just the price that's attractive to potential owners of the tiny homes. Transitioning to a tiny home is a great way to go green, with many positive effects on the environment. According to enthusiast site TinyHouseBuild.com, tiny homes use dramatically less lumber and electricity. Based on available EPA data, the site estimates that the average home releases 28,000 pounds of damaging carbon dioxide, whereas a tiny home only releases 2,000 pounds.

You'd think the exponential growth of the industry based on media exposure and people's desire to simplify their lives and help the environment would be music to Weissmann's ears, but he says it's a double-edged sword.

"The fact that there are so many people who are jumping into this industry, it makes it hard to actually survive," said Weissmann.

And the numbers back this up. Tumbleweed has gone from having zero competitors when Weissmann first invested in 2007 to roughly 200 today.

Despite the "mixed blessing" of the new tiny home trend, Weissmann isn't necessarily worried. He thinks in the long run, the exposure will be "fantastic." Lucky for him, many of his new competitors give up after a building a couple of homes. Tumbleweed on the other hand isn't going anywhere.

Tumbleweed Tiny Houses is featured on this week's all-new "The Profit" on Tuesday at 10 p.m. ET/PT