MH Myth Buster: Manufactured Home Value Retention has Equal Standing as a Site-Built Home
The most difficult objection a salesperson will confront when interacting with a potential home shopper is the most often expressed belief: “A manufactured home is a poor investment, because they depreciate.”
That belief is a lingering myth, not only prevalent with manufactured home shoppers, but more importantly there are many potential home buyers that will never consider manufactured homes for purchase because of the preconceived notion of “mobile homes” from long ago that have been pased down from generation to generation are like automobiles; they depreciate.”
That characterization has not been accurate for many years, yet the myth is still prevalent with those that have not explored the realities of today’s manufactured housing as a sound investment equal or superior to site-built homes in every respect.
The long standing beliefs that manufactured homes do not appreciate in value as opposed to traditional site-built homes is contrary to the facts that today’s manufactured homes have equal standing with a home built on site, in terms of return on investment – positive or negative.
Studies since the 1980’s consistently indicate that modern manufactured homes sited under the same conditions as site-built homes will appreciate or depreciate subject to the same factors as a site-built home. The conditions listed below will have the same impact on all homes.
- The housing market in which the home is located.
- The community in which the home is located.
- The initial purchase price of the home.
- The age of the home.
- The condition of the home.
- The features of the home
- The inflation rate.
- Supply and demand.
The appreciation in value of a manufactured home comes back to the old real estate axiom, “location, location, location.” When properly sited and maintained, manufactured homes appreciate, or depreciate, at the same rate as other homes in surrounding neighborhoods.
Another consideration that weighs heavily in the appreciation/depreciation factor is the original purchase price of the home.The following should always enter the defense against ngative appreciation assumptions vs. site-built homes.
Today’s modern manufactured homes can deliver quality and performance with the original cost averaging one-half the cost of a comparably sized home custom built on-site and will be equal, often superior, in every respect, including building materials, quality of construction, energy efficiency, amenities, appearance and enhanced safety in occasions of wind and fire.
Need more ammunition? A report from the Urban Institute, a Washington. DC think tank, examined data released in 2019 by the Federal Housing Agency. The price index for manufactured homes nationwide featured an average appreciation growth rate of 3.4%, versus 3.8% for traditional site-built homes.*
In recent years, home price evaluations have actually risen at a faster clip for manufactured homes than they have for site buil homes, according to the report.
* The Urban Institute report summation states: “Manufactured housing is underrepresented in center cities, which have experienced the most rapid home appreciation, and over-represented in outer suburbs and non-metropolitan areas. There are few manufactured homes in downtown San Francisco or Manhattan. Accordingly, our comparison disadvantages manufactured homes versus a measure in which we compare properties in the same area.
