"The couple wanted to keep a lid on building costs, but they did not want to sacrifice great design and solid construction. They met both goals with a two-story modern built by Alchemy Architects, in St. Paul. 'During the day we have a lake view from 8-foot windows,' says Scott. 'But when we close the curtains at night, the living room is chic enough to feel like a New York City apartment.'

The McGlassons' hideaway -- with two bedrooms, one bathroom and tons of personality -- is a prefabricated home. The components were assembled in a factory, trucked to their lot and put together....

Scott and Lisa paid $95,000 for their second home. They chose the layout of the first story from a half-dozen of Alchemy Architects' plans and added a second story to the blueprints, expanding the size to 780 square feet. The firm hired a Wisconsin factory to manufacture the house's components, a process that took about six weeks. The components were trucked from the factory on a flatbed, and a crane helped assemble them (delivery and crane costs ran $6,000). The McGlassons hired contractors to connect the house's wiring to the electrical grid, dig a well and do other finishing work. The final tally was about $160,000, including fixtures and appliances."

"Panelized houses are made of sections stuffed with wiring and insulation. The panels are trucked to your lot, where contractors hired by you (or less commonly, by the prefab firm) join them together. Panelized houses tend to cost more than modular ones. But because the panels can be arranged in different ways, panelized houses can have custom options....

The flexibility of a panelized house makes it superior for building on mountain, beach and lakefront locations, which tend to have more quirks than the typical suburban lot....

The major limitation of modular houses is size: Modular units must be able to travel down highways. 'We have to do a lot of thinking within the box,' jokes Joseph Tanney, a partner at Resolution: 4 Architecture, a New York firm that builds prefab homes using modular and other methods. What's more, modular houses often need thicker-than-usual interior walls to ensure that they will withstand the stress of being lifted onto your lot by a crane. (Panelized homes don't face this problem.) These thicker walls reduce the number of floor plans because there are only so many ways the fatter walls can be disguised."