Manufactured Home Sales Robust, Site Built Struggles: A Look Back and Forward
As most are aware from first-hand experience, the nation has been struggling to recover from a recession that crippled our financial and housing markets. And for those historians among us, they understand that, as a nation we experience some type of recession about every 8 years. Well, guess what? The last recession began back in 2008! And just as traditional site-built prices have finally clawed their way back from the pre-recession “Housing Bust” of the 2000’s. Those fortunate owners that avoided an ugly foreclosures process are only now recovering some of their previously lost equity upon resale.
Manufactured Home Sales Robust, Site Built Struggles: A Look Back and Forward
Manufactured Home Sales Robust, Site Built Struggles: A Look Back and Forward
You would think that rising values would be positive for the housing industry, but this is not necessarily so. With a generally struggling economy, the high prices of existing homes and the lack of new housing inventory, combined with onerous government financial regulations, unfortunately makes it virtually impossible for the average worker with stagnated wages to qualify or afford an average site built home.
Stagnant Wages Help Create Robust Manufactured Home Sales
Over the last five years the manufactured housing industry has not only survived the nation’s housing woes, but rather has emerged as the only non-subsidized affordable home ownership available to America’s workers.
In 2015, the shipments of manufactured homes increased in all areas of the country. Primarily thanks to the fact that manufactured home prices have remained fairly static for the past several years, as they are not subjected to weather conditions, building material waste, or costly delays common in site built construction. Manufactured homes have a construction cost about half that of a comparable site built home.
Manufactured Homes “Value” Embraced by Cash Buyers:
The affordability and quality of today’s manufactured home is not only embraced by those without the means to buy a site built home, but has become the preferred choice of cash buyers who recognize the value of a manufactured home that is equal and sometimes superior to a comparably sized and equipped site built home.
MFH are built in a factory environment
Jess Maxcy, President of the California Manufactured Housing Institute (CMHI) recently stated “that 74 percent of all buyers of manufactured homes in California paid cash.” Maxey does acknowledge that this could also mean that affordable manufactured homes in California are not necessarily as affordable as they should be, were it not for expensive regulatory requirements not present in other parts of the country.
Placement of individual manufactured homes sited on private property in California requires prepayment of numerous fees and assessments that can range from $15,000 to $20,000 for each home. This includes school fees, developer fees, earthquake systems, assessments, taxes, escrow fees, and permits required by the state or local jurisdiction.
Manufactured Homes “Deep in the Heart of Texas”…
The Lone Star State of Texas is the complete antithesis of California with low taxation, minimal bureaucracy, lots of affordable land, available jobs and a positive, welcoming relationship with the manufactured housing community.
Manufactured home shipments in Texas led the nation for the fifth consecutive year in 2015 according to official statistics by the U.S. Department of Housing and urban Development (HUD). Retailers in the state of Texas accounted for almost 20% of total manufactured home sales nationwide.
Manufactured Home Sales Robust, Site Built Struggles: A Look Back and Forward
The dream of homeownership is becoming more elusive for middle and lower income American workers as we enter the new year. Stagnant wages, a continuously struggling economy, and government regulatory reforms will undoubtedly prevent most Americans from realizing that dream of owning a traditional site built home in the near future, or perhaps forever. However, the alternative of owning a quality, affordable factory-built home may fulfill that uniquely American dream in every aspect in the New Year.
