Are manufactured homes a dying breed?

[Mark]

For a couple weeks I've pondered writing this commentary, so figured now would be a good time to 'get r done.'

Month after month I read in the industry magazines how sales of new manufactured homes continue to spiral downward. 2007 saw it's 10th year of sales decline. In fact, experts are saying that less than 100,000 new manufactured homes were sold nationwide in 2007. That's the fewest number of homes sold since 1961. No wonder so many factories are closing. Does that mean manufactured homes are a dying breed?

Let's step back and take a look at the industry. The reports I've read do not include used home sales. I believe the used home market is as vibrant as ever. However, the job of the industry is to sell new homes, so the used market isn't dwelled upon much.

In my opinion, we're seeing a decline in manufactured house sales because the market has shifted to modular homes. The fact that many dealers have added modular homes to their line-up is testimony to that.

In some ways, modular homes are real similar to manufactured homes. Instead of fighting that trend, maybe the manufactured housing industry should figure out a way to join it!

Despite the efforts of industry professionals, cities still have a stigma against wanting homes built to HUD code in their towns. If that sentiment hasn't changed by now, it probably never will. Most modular homes are built to UBC code, not HUD code. And with modular homes often comparable in price to manufactured homes, why should anyone buy a manufactured home that will probably just decline in value.

Or maybe the industry needs to separate itself from modular homes by getting back to the basics of building affordable manufactured homes. Get back to building a no-frill home that the average working American can afford.

It's not that the manufacturers can't build cheaper homes. They do it for FEMA all the time. In fact right now FEMA has 19,000 homes stored at a facility in Hope, Arkansas. (Now that would be a site to see!) I bet those homes are built for about 1/3 the cost of homes found on today's dealers lots.

In my opinion, new manufactured homes are not that affordable anymore in comparison to other housing options. Maybe stripped-down FEMA-type homes aren't the answer either. But what about a happy medium between today's home and the FEMA home? Maybe its already being tried. But if it is, I sure don't see them on my local dealer lots.

Mark

[Serena]

It's a huge subject, isn't it?

Speculation is a tricky thing, so perhaps a report will give an idea of part of the "lie of the land" these days.

The MHP where I live is about 45 years old. There are a lot of trees and green spaces. There are many empty lots. The houses are mostly from the 1970s - early 1990s. A few of us have older ones. There are none older than 1963 because the owners of the MHP, at some point, decided they did not want "old trailers" here and denied the MH-owners the right to sell their houses, forcing them to have to have their MHs towed away. This is an owner-occupied MHP: no renting, no sub-letting.

The park owners have redone some of the lots for RVs. RVers are now their main income. There are quite a few empty MHs and the ones for sale are at ridiculously low prices. (Partially due to the requirement that all new MH-owners must be approved by the park owners.)

Somehow, in the midst of this old neighborhood (which I like very much) someone bought a brand-new, gigantic singlewide and moved in. As far as I know, there is only one other house newer than 11 years, and there are 200 lots here.

The other safe MHPs in this area are corporately owned and run, and the lot fees are higher. Most of the MHPs have the houses packed in like sardines, have high lot rents, high crime, high noise, etc.

I do agree that new MHs are cheaply made, but I think you were referring to more and less expensive.

I'd like to see small, affordable houses, and "green" building codes.

My two-cents worth having been said--I wish I could zip over to Arizona and buy this little house.

http://phoenix.craigslist.org/rvs/570214480.html

Am looking forward to reading what others have to say.

Thanks for starting this topic.

[Jim from Canada]

I think the biggest problem here is the stigma that comes with a MH. In my park it is justified. Many townships refuse to let a MH on any land except a park and they are becoming less and less because of the lack of care and mainteance performed by land owners like mine. When you have lots that look like scrap yards and homes repaired with tarps and tin, then you get a reputation. Of course the city and the law enforcement officials could do something, but they don't. The land owner could also do something, but he seems to want the park to deteriorate. We have one home here without water or electricity or natural gas. The person that owns it heats with a wood stove that is not MH rated and was put in without a permit. For washroom facilities, he uses a bucket and dumps it over the fence into the wooded common area. But, he is related to someone of importance, so he gets away with it. We were at 38 units, now down to 35 because of places being condemned and 1 that burnt down, the replacement unit the insurance put in was bought and moved. The landowner buys many of these junk heaps for next to nothing and then sells them at a handsome profit to unsuspecting families. Then lets them go wild in there. I could go on, but I think the picture is clear enough.

Jim

[Koiflowers]

Serena.

Hubby and I bought a 1965 airstream earlier this year (8x30). It's much like the one in the site you posted. Beautiful real-wood interior, every square inch of space utilized for built-ins. We're spiffing it, but can't wait to be able to really use it. We have to test the systems, since it sat for 25 years in the same spot and was used as a "dry" camp.

Here in Texas I see MH sales offices everywhere I look. Some are finally offering the homes that look more like houses: nice siding, steeper roofline, porches. They place them on engineered foundations they say run from $2500 to $6000 depending on the site. However, for price it would be quite possible to have a stick-built house in the same spot. On the upside they have 9' ceilings, crown-molding, fireplaces and readily available for a quick move.

Very few people I know could afford one though, although they advertise: no credit, bad credit, no problem. The catch is that you MUST sign a "certificate of attachment to the property" so the mortgage company gets your land if you miss payments. In our case a $47,000 MH sits on a piece of property valued unimproved at $153,000. Add the $10,000 aerobic septic, additional costs of well, electricity, gas meter, garage, and the mortgage company walks away with a $225,000 piece of property for the original $47,000 loan - plus they take the MH.

Here's the hook where I live in Texas: If you own land, you can own a mobile home. Bad credit, no credit, no loan is turned down. I call it a big extortion attempt by the mortgage companies that make MH loans to take land away from the working class. If that weren't the case even a MH buyer would need a good to fair credit rating.

That's my two cents.

[Yanita]

Hi,

I think that single wides are going to become a thing of the past. I have noticed over the past few years that most single wides are now on used lots, not at manufacturers lots. Everything around here is double wides and triples and the higher end companies are starting to incorporate the modular homes.

For us zoning is really getting strict, land owner or not does not mean that you can place a manufactured home on the land. In fact in some areas no manufactured homes, BUT, modular are allowed.

The cost of a smaller double wide, is still fairly reasonable around here. But to purchase one without land is another story. As Koi said in her post, the home mortgage and land are tied together. Lose one you lose it all.

A friend recently was in the market for a double wide, a 32x80, pretty home, reasonably constructed, but nothing fancy on the inside. Once the home and land package was put on paper the total mortgage payments was going to be in excess of 800.00 monthly. That mortgage was out of their comfort zone so they are looking at different options.

Most of our older parks that included mainly single wides are now gone. Big business has bought out the parks and in place of them are mini malls, and town houses/condos.

We do have a few MH communities, but these are strictly double wides, and must be within 5 years old, and of certain sizes. Of course these communities are also setting themselves up like high dollar Mcmansions, homeowners fees, restrictions on pools, trampolines, the amount of vehicles you can have , motorcycles, even dictate the types of plants/trees you can have ....

Modulars, the cost around here for even a small, plain home is very high. Hubby and I researched them a couple years ago, we figured out we could build our own for less! Go figure.

So, yes, I think that MH living is going to take a hard hit, at least the single wides. If your home is more than 5 or 10 years old forget trying to move it to another park. Also, although not said out loud, if your home has metal siding it will not be allowed, or they will say it needs to have vinyl siding!

Happy Valentines day!

Yanita

[Mark]

In our county, you cannot put a mobile home on your land unless you own a minimum of 40 acres, or the land is zoned as such.

So it's not just cities who become unfriendly to mobile homes, its counties as well.

Around here modulars still cost more than mobile homes, but they tend to use more real-wood products in their homes. If they put the same materials in modulars that they do mobile, I bet the price would be pretty dang close. Of course a modular would need a beefier foundation, but you'd probably get a lower interest rate with modulars, so the costs may wash that way.

Mark

[Serena]

I called the Planning, Development and Zoning Dep't for my county. Here's the scoop for putting a MH on your own land:

Within the RA-200 Agriculture-Residence District, the following
uses may be permitted provided the applicant for such a
development is granted a Special Use Permit by the Board of
Commissioners after receiving recommendations from the Director
of Planning and Development and Planning Commission and after a
public hearing:
...

3. Manufactured Homes.

There is a 30-page permit to fill out, who knows how many fees, and a public hearing. I wonder how much it takes to get the hearing.

The county is changing its zoning in order to remove all MHs. The planner told me that this is because "they" want to be a metropolitan area. This county is historically farmland!

[Dean2]

I live in a small park with all singlewides. Most are older ones. Mine is a 76.I'm told the park is about 11 years old . It has only about 20 homes and those are in 2 different areas 2 blocks apart. Being a fairly new park I hope it will last.

These folks getting rid of parks will regret it,,where will the "park people" go? They'll end up somewhere else bringing property values down or in newly built low income housing that then deteriorates and costs everybody money somehow.The whole thing is just to bring neighboring values up,,form a commitee-get more for Your house,,,that behavior just for a few thousand dollars is just as bad or worse than what goes on in the parks I've seen..They just paint a different face on it and call it "legal",same old story if injustice tho..

They also end up taking these loans like the ARMs,,well what now? They are losing that house They bought after the parks were eliminated! Better get hammerin some rentals together or figure out some way to house them that is affordable eh? Geeez,,maybe they could be paid a fair wage too so they did'nt have to live in a park in the 1st place! Nope,,hold the phone,,that does'nt work either cause then they actually have a life and reason to smile like the commiteee members,,ca'nt have that..

I say if a body wants to live/die in a cardboard box then let them,,if they wanna go after a $50,000,000 mansion then let them do that too..ANY other answer is gonna eventually cause more problems in the "big picture" than it solves,,if Ya wanna know the future then look to the past,it's all there plain as can be.

I think the only *good* reason for *any* neighborhood commitee would be to address health and safety issues in a *caring* way and *not* to bring property values up as the prime motivator. Of course there will be those that disagree strongly,,it would be nice to see their portfolio eh? Both now and after their comitee has matured! LOL!

Crazy Dean at Yer service..

[Koiflowers]

Dean2 wrote:


I think the only *good* reason for *any* neighborhood committee would be to address health and safety issues in a *caring* way and *not* to bring property values up as the prime motivator. Of course there will be those that disagree strongly,,it would be nice to see their portfolio eh? Both now and after their committee has matured! LOL!

I'd like to respond to this. Although mobile homes are allowed in my entire County, individual Property Owner's Associations govern many subdivisions. Our deed restrictions allow mobile homes, and since the 70's they have coexisted on the lake with every price-range of site-built houses.

In 2003 a brand new board took office when the old board asked to resign - all were owners of site-built homes. They reinterpreted our deed restrictions as not allowing ANY mobile homes because a phrase that "nothing of a temporary nature" may be placed on the property, such as shacks, trailers, tents, etc., which went on to say 800 sq. ft. minimum. (not a quote)

Suddenly after 30 years and a new POA, no trailers allowed. And if you sold your property they wanted the "offensive" trailer removed, immediately. I went to the court house and found another set of restrictions for Annex D in the same subdivision with the exact clause. However, it went further to state that the mobile homes in this section had to be 1000 sq. ft. or more, and that RV's were sill allowed if hooked up to water/sewer/elec.

Clearly the developer did not consider a mobile home to be a temporary structure. I always say, get an attorney and pay him to think like you do.

The POA hid these restrictions because it made it black and white that mobiles were always allowed. They even hired an attorney to evict a nice RV from that annex.

The Board grew more and more bold, serving life terms, raiding $100,000 from coffers, no treasurer's reports, refused to allow anyone access to the books and records unless they paid over $300 for the privilege. They grew arrogant, evil, and lawsuit happy. If you asked for a building permit, and they didn't "like" the request because it was for property with a mobile on it, you would get a threatening letter from an attorney denying the permit and a demand that you pay his "fees" or face a lawsuit. Fees were usually $260-$350 range.

We just took back our subdivision. 8 Months, $6,000 in attorneys fees, 2 trips to court. Sometimes you just have to fight for your rights.

[Sylvia]

I think at this time with the housing market spiraling downward and it being a buyers market with the combination of the recent trend to loan people who only qualify for sub-prime loans, people who would have bought a MH are buying stick homes.

I believe that as the market corrects itself the pendulum will swing the other way. The recent debacle of the FEMA trailers may be a major factor though.

[Greg]

Over and above the regulation aspects, I think a few factors are involved. The pricing of manufactured houses combined with some of mortage "deals" on stick built homes are turning people away from manufactured homes.
The "horror stories" of owning and living in a
"trailer" plus the media attention towards "trailer parks" any time there is anything even remotely negitive, (tornados, murders, fires) things that would never strike a stick built.
In addition the people that used manufactured homes as starter homes now want to start at the top rather than work their way up.
I am sure ther are many more factors involved, and these are just a few that come to my mind. Greg

[AmericanaMan]

Wow. That is a bad POA.

Unfortunately I know what you mean. I live South of Omaha. Most people move out West of Omaha. Lately they ran out of space between Omaha and the Elkhorn River. Now they are moving South. There was a nice park for MH and trailers in the woods. I think it was a real park. One day, everybody had to move. The trailers left. Most of the MHs left. A few couldn't move the MHs. The bulldozers took out a small house and the MHs. That has happened to a lot of trailer and MH communities lately. Then very cheaply built houses pop-up with POA and rules. Most probably the ghettos of tomorrow.

To cut corners, the developers build the houses with too shallow a roof incline. Ice builds up in an ice dam on the edge, then backs up the roof, melts a little, then leaks into the cheaply built new home which falls apart.

People call this development "progress." When the corporate retail stores and etc come in and put their businesses out of business, force them to move away, they always wonder "What happened."

Oh, well. Time to move more South.

[oldfart]

Well folks after reading all the well thought out post above I ponder... what I could possibly add to them. Hmm? I've never been a "man of means." Never had a lot of education and have no political ties. Don't much care to nither. I've always worked hard..usually 1 full-time job and scores of side-line work. An average work week is 60hrs...and yet I make about half the $50K. per year that I hear is the normal wage in south-central Pa. Go figger? I've never had much concern to own a $250K home..even if I could. I've learned that some folks just have to learn to make do with less and I rekkin' that's my lot in life. I don't mind. I got an acre of ground and an old mobile home. I fish the creek in my back yard and hunt the farmland on all 4 sides of my home. My taxes run about $400 a year and my home-owners insurance is $250 a year. Some folks might turn up their noses at it..but they's a recession coming just around the corner! I don't rekkin' it'll affect me..recession..depression...just meaningless words to an ole geezer like me. Folks need to learn to buy what they can afford..simple as that. And, mind ye, tuck away some money fer hard times. No bills, no debts, no credit-cards, no mortgage, no car payments. Some folks just can't grasp what life is like not owing somebody something. I can! Life is good! Audie...the Oldfart..

[cjh]

In 2000 in my area there was a boom in manufactured home communities. Then in 2005- early 2007, there was a huge bust - lots of dealers went out of business. The dealers are coming back, and there are newer homes coming into my area, both singles and doubles. A lot of people who own singlewides are now upgrading to doublewides. It has definitely seesawed a lot.

The big "trend" in my area - investors are starting to buy these used singlewides. They place it on a 1/2 acre or more, fix it up and either lease purchase it or owner finance it.

[wayne]

Interesting thead
The park I live in has about 100 units. All doublewides and all have cement block foundations and garages. It first opened in 1989 and was expanded 3 years ago and are going to expand again this summer.
Here in south east Michigan the housing marked is really bad but people are moving in here because its more affordable I guess.