Ernest,
I agree that the assembly-line method of production certainly adds some major cost saving to the manufacture of homes but I believe the real cost saver is the HUD code. HUD regulates the quality of the homes being built in this country since 1976. They allow homes to be built with 24’ on-center roof rafters, lower roof pitches, no exterior sheating, etc. This adds tremendous savings in the cost of the final product. Stick-built homes, on the other hand are usually built to a BOCA code (at least in the northeast) which requires heavier materials and construction techniques. That is where I think most of the difference in price comes from.
It is currently midnight, and I have been reading 3 year old thought inspiring articles from Doc, Tony-VA, Jacque, and many many others about random MH topics. My parents don’t understand why I stay up til 2am every night doing this. But all of a sudden a few minutes ago, it occured to me, what is the future of mobile homes. Now I dont know if I am being nieve with this question, but seeing as how my newfound endeavour involves these rectangular edifices on wheels, I am just a little curious to see where others feel the direction of Mobile homes is going.
Now I just closed on one 7 unit MHP that has some section 8 tenants, and will close in 3 weeks on a 10 unit park that is all section 8. I am also begining to look into buying land/home packages or just the losts. But my mind started to wonder what is to become of these types of properties if the MH concept goes capoot(?). Should manufactured housing become obsolete or go by the wayside, what am I to do with all these wheels that were formerly deals that are stuck on the land?
I think I may be rambling a bit here, but i am just curious to see how long people feel the manufactured housing market will be around, and how long it will continue to be as profitable as it currently is.
Thanks to all who read and respond to this post as I am so anxiously waiting to see how long the thread gets. I love staying up late at night reading all this great site has to offer.
Re: The Future of Mobile Homes - Posted by Ernest Tew
Posted by Ernest Tew on July 12, 2003 at 09:22:00:
Ryan, I suspect that mobile homes (now called manufactured homes) will be with us for many years.
Like other industries, the mobile home industry has its up and down cycles. New mobile home sales are currently in a down cycle. The greatest reason probably lies in the fact that most people would prefer to live in a conventional ‘stick-built’ home when given the choice. With long-term financing readily available at low rates for conventional houses, a lot more people are able to buy a home of their own.
When interest rates rise and financing becomes difficult for most people, many will turn to new and used mobile homes as their best alternative. This will probably occur within the next two years.
Those who understand the game will find that a weak economy can be very beneficial to those who find solutions to problems others may encounter.
Considering the fact that most Americans fail to set priorities or plan for their future, we will always have a lot of low-income people. Mobile homes can continue to solve much of their housing problems.
Government policies not only eliminate new parks, which makes existing parks (from what I’ve seen here out west) so expensive that new buyers cannot make reasonable returns on their money, but said policies also prohibit new mobile homes on private land, preferring instead to fleecing stick-built homebuilders by adding horrendous “development fees” and requiring them to reserve units for sale at below market prices (which wouldn’t be below market if they weren’t paying those fees). Not only does this further entrench the hated mobile home park, but it doesn’t help lower-class families, since even a below-market stick-built home is much more expensive than a manufactured home. Zoning policies tend to further slum-ize private mobile home areas by prohibiting replacement (so you have to build a stick-built house and pay those addictive fees). It’s extortion at its finest, from the only “industry” that grows bigger the more it fails. Municipalities are doing their best to make mobile homes a zero- or negative-growth industry. With all due respect, Ernest, I just don’t see from where future growth in the mobile home industry will be coming.
Thanks for replying Ernest. I appreciate your insightful response. One other thing i was wondering in conjunction with this post is, do you or anybody else, see a change from Manufactured Housing towards any other type of low-income housing. I can’t really imagine any other kind of low income housing as effective profit and affodability wise.
Re: The Future of Mobile Homes - Posted by Ernest Tew
Posted by Ernest Tew on July 14, 2003 at 17:29:19:
Ryan, it seems that any other alternative to mobile homes would cost more. Over the years, I’ve seen several companies attempt to manufacture homes that could be trucked to the site and set up on private land. Almost all have failed to compete with mobile homes and have gone out of business.
To better understand why mobile homes cost less, take a tour of one or two mobile home manufacturing plants to see how efficient an assembly line can be.