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Manufactured Housing facts from the National Association of Home Builders (NAHB) Report

September 3rd, 2014 No comments

The following information comes to us from the National Association of Home Builders (NAHB), forwarded from various state executive directors and MHI.

We estimate that in 2014 the average price of new manufactured homes (including the cost of lot development) is $53,230 for single homes and $100,259 for double homes. Increasing the price of new single manufactured homes by $1,000 will disqualify 347,901 households from being able to afford these homes. Similarly, if the price of new double manufactured home rises by $1,000, 315,385 households will be priced out of the market. The effects are NOT cumulative, since they are based on the same income distribution of all US households. These are NOT effects on sales, rather only on ability to qualify for a mortgage.

Our new manufactured home prices are based on the average sale prices for single and double new manufactured homes reported by The Manufactured Housing Institute (MHI). They are further adjusted for inflation and additional costs of lot development. The inflation factor is the increase in new manufactured home prices from 2012 to 2013 as reported by the MHI. The lot development cost adjustment is based on the NAHB survey of construction costs.

NATALIA SINIAVSKAIA, Ph.D.
Housing Policy Economist
Survey and Housing Policy Research

National Association of Home Builders
1201 15th Street, NW
Washington, DC 20005”

While some voices have made hay out of this report to show that even the home builders agree that price hikes of every $1000 leave hundreds of thousands of potential MH or other home buyers behind, let's flip this for a few moments.

Let's focus on this: “We estimate that in 2014 the average price of new manufactured homes (including the cost of lot development) $53,230 for single homes and $100,259 for double homes.

Using the $53,230 loan amount, a 4% FHA loan for a land/home purchase, at 30 years term the principle and interest (taxes, escrows, other costs not figured into this calculation) would be approximately $269.71 (before you object, yes, some lenders do make and FHA allows for FHA Title II loans on single section homes, the multi-sectional restriction is an overlay that some lenders impose).

Using the same idea as above applied to the multi-sectional with home-site numbers ($100,259) from NAHB's study yields a $478.64 monthly payment (disclaimer again, principle, interest only). This is clearly 'affordable' housing!

Both the GAO in their recent report, and Fannie Mae in a previous study, indicate similar payments that reflect the fact that manufactured housing is the most affordable permanent (as opposed to RVs or other seasonal) homes on the market today.

fanniemae-2011-chart1-affordable-manufactured-housing-posted-daily-business-news-mhpronews-362x430

FYI, credit studies suggest that some 58% of the U.S. has a credit score that is at or above a 692 FICO, as the chart above from Experian and Money-zine reports.

credit-score-chart-courtesy-of-Money-zine-cutting-edge-blog-mhpronews-

When you look at the facts here and consider the satisfaction and affordability suggested by the recently published Foremost Insurance study, or the CNBC discussion on a potential 5 to 6 million Americans who could be buying a home, and a picture of the industry's strong upside potential comes into sharp focus.

But, Tony, I'm not seeing those 692 credit scores at my location!” some say.

Sorry, but that my friends and MH Industry colleagues, is because the wrong kind of sales and marketing approach is being used! “Damaged credit OK” advertising brings you exactly that, and if you don't use those sorts of ads, so many in our industry have for so many decades that this is embedded into the psyche of millions of credit challenged customers. Remember these lyrics… Trailers, for sale or rent, rooms to let for 50c…

When you learn how to attract and sell the site built home buyer, you will get more of that as time goes on.

When you and more in the MH Industry mature to the point that we are selling good homes that are appealing AND affordable, you'll see more sales to cash and good credit customers, and more sales of new MH and MODs. That's a fact and I'm sticking with it! ##

latonykovach-com-brushed-cutting-edge-marketing-sales-blog-mhpronews-com75x75-By L. A. “Tony” Kovach

Sparks Wrap up the Discussion of the Future of the Land Lease Business Model, National Communities Council 2013 Fall Leadership Forum

October 20th, 2013 No comments

Each of the panels and presenters at the 2013 National Communities Council (NCC) inaugural 2013 Fall Leadership Forum offered multiple take-aways which properly applied could have been worth more than the price of admission.

/randy-rowe-r-green-courte-partners-chairman-gary-mcdaniels-yes-communities-joe-stegmayer-cavco-stephen-bruan-hometown-america-mhpronews-cutting-edge-blog- (1).jpg

Randy Rowe (l), Gary McDaniel, Joe Stegmayer, Stephen Braun (r)

For this column, we will focus on a very focused segment of the final panel discussion – The Future of the Land Lease Business Model – which featured Randy Rowe, Green Courte Partners (GCP), Gary McDaniel of Yes! Communities, Joe Stegmayer, Cavco Industries and Stephen Braun of Hometown America.

Don Westphal commented during the discussion that manufactured housing is “….the only industry that succeeded in spite of itself.”

Joe Stegmayer commented on the importance of sales training and product knowledge.

Since marketing, image and branding where among the topics at the NCC Fall Forum, certainly Don's and Joe's comments could have easily been applied to what is often the lack of a proper implementation of marketing and sales training in our industry. Does this cost our industry and land lease communities business?

A number of Industry Voices guest blog posts last month answered that question with a strong “yes.”

The subject of national MH Industry image campaign came up near the end of the panel discussion. Cavco Chairman and CEO Joe Stegmayer stated that “We would be willing to support” such a campaign.

Randy Rowe is a long time proponent of an image building and other professionalism enhancing efforts, as is showcased in this exclusive interview, linked here.

Green Courte's Chairman underscored that ½ of a percent or somewhat more of industry new home shipment revenues could fund a campaign that would rival the size of the highly successful GoRVing campaign, which is about $18 million a year.

Gary McDaniel said he disagreed.

Such a campaign, he argued, “Won't do much for us.”

McDaniel's offered up a common argument made by those who oppose such an effort, by saying that local, community level marketing and good business practices would do more for our industry than an image building effort would do.

Yes! Communities McDaniel's went on to say that if someone wants to call our homes a “mobile home,” then “God bless them.”

“A clean, affordable and safe place to live,” said McDaniel, “rather than respectability,” is what our industry's traditional home buyers seek.

To this comment Randy Rowe dove in with the comment, that while respecting McDaniel's, “I strongly disagree.”

Rowe pointed out that just getting around the “trailer moniker is huge.” “These are great homes,” Rowe said, built in a “temperature controlled environment.”

GCP's Chairman Rowe clearly expressed his conviction that we as an industry would attract more customers including those who are financially more affluent customers by improving our industry's image.

Beyond the NCC Fall Forum thinking

MHProNews has long supported the need for enhanced professionalism, including image building. This includes sales training which GMHA's Jay Hamilton said in this guest column was crucial, combined with image building.

Drew Chairman Leigh Abrams took a position very much akin to that of Randy Rowe in his interview, linked on his name above.

While we would whole heatedly agree with Randy Rowe's position – that a full fledged image campaign has strong merit and value to build the future of land lease communities and the industry at large – the nuance noted above has an echo in Gary McDaniel's call for sound professional performance at the local level.

We'd also take the editorial view that manufactured housing doesn't have to invest 10 million or more to get some benefit from image building. Image can be improved subtly but surely and at a low cost via online efforts, which other presenters at the NCC forum pointed out.

It is precisely with that thought which motivated the launch last summer of ManufacturedHomeLivingNews.com. We are already generating leads for pros via that platform that attract customers who may not have considered the manufactured housing option otherwise.

The Industry In Focus Report on the study by NAR and Google on Why You Should Target Home Shoppers Online clearly underscores the value of doing such online image building efforts.

Sam Landy of UMH Properties fame stated in his interview linked on his name that he sees how the industry could rise to 300,000 to 400,000 shipments again. Image building is part of the key!

UMH and CU Factory Built Lending are among those early supporters for this online image building effort.

Until the industry is willing to invest millions, a small fraction of that and the 3 easy steps found on the download linked at the end of the article here would turn ManufacturedHomeLivingNews into a significant force fueling more sales, could improve our political clout and improve the image for communities and our industry at large.

It is better to light one candle than to curse the darkness. Those interested in “lighting candles” are encouraged to sound off or contact us at the number or email below. We are better off when we advance our image and professionalism together. ##

PS: Check our many Exclusive and Red Hot Featured Articles for October and see the other new stories at MHLivingNews.com too.

L. A. "Tony" KovachL. A. 'Tony' Kovach
ManufacturedHomeLivingNews.com | MHProNews.com |
Business and Public Marketing & Ads: B2B | B2C
Websites, Contract Marketing & Sales Training, Consulting, Speaking:

MHC-MD.com | LATonyKovach.com | Office 863-213-4090 

Connect on LinkedIN:
http://www.linkedin.com/in/latonykovach 

Concerns on Home Buyers’ Minds

August 4th, 2013 No comments

Trulia published a report recently that summarized the 6 concerns on home-buyers minds. The report has implications for manufactured home sellers as well as the broader housing market Trulia was addressing. Let's dive in and see what we can learn from even a brief analysis of their report.

Quoting:

Worry:  Mortgage rates and prices will rise before I buy.  Trulia’s Economist Jed Kolko reports that “the top worry among all survey respondents who might buy a home someday is that mortgage rates will rise further before they buy (41%), followed by rising prices (37%).”  The worry is valid, given the fact that the market was depressed for so long and has a long recovery road ahead of it.  It’s compounded by the fact that buying a home has gone from something that used to take a month or two and now routinely takes 6 months, 9 months, a year or even longer!”

Wow! Every one of these can be turned into a positive for the savvy seller of manufactured homes.

  • Rising mortgage rates has often been seen as good for our industry. My own take is more nuanced, but that's a discussion for another time.

  • Rising prices – this is another positive for our industry, as housing shortages and even some markets that have bidding wars. When conventional home resale prices rise, the price differential for our new product grows, to our benefit.

  • Length of time to purchase. In most cases, we can even order a customized manufactured or modular home and have it done much faster than 6 months, vs. the 6-12 months it may take some to get a mortgage for an existing house.

Quoting Trulia:

“Will:  Be aggressive. B. E. Aggressive. Economist Kolko explained, “among survey respondents who plan to buy a home someday, 2 in 3 (66%)  would use aggressive tactics such as bidding above asking, writing personal letters to the seller, or removing contingencies, to name a few.”  What buyers do and don’t do in the name of aggressively pursuing their dream homes (and, consequently, what sellers expect) is slightly different in every town.”

north_water_street,_new_bedford,_ma-posted-mhlivingnews-com-2.png

You could buy about six of the homes at the right for the price of 1 house at the left, size for size.
The one at the right has a double car garage, is more energy efficient and has lower taxes too.
Hello? Anyone's light bulb going off?

Egad and Zoikes MH Pros. Think about this.

The National Association of Realtors (NAR) are running radio spots that underscore this reality of homes selling like hot-cakes in many markets, where some buyers will 'bid higher' (offer more) than the listed asking price.

Here our industry routinely pushes 'affordability,' but look – when people like what they see, buyers are often willing to pay MORE to get what they want.

IMHO, way too many MH retailers and communities are afraid to offer anything but the cheapest home they can get their hands upon. Meanwhile, in the 85% of the housing market where billions upon billions of houses are sold, people will pay more than the asking price, to get a house/location they want.

One of the most popular reads on our ManufacturedHomeLivingNews.com website is the article entitled:

Who wants to be known as the most expensive factory home builder in a market? Us!

Clearly, people want to know what the upper end of MH is capable of doing! But another hot read is this one:

A Factory Built Home means you can pick your location and your home.

This last point is something a realtor can't touch. The house is where it is. You may love a home, but hate the location. With factory built homes, you can find a location AND a home that fits your lifestyle, taste and budget.

Ladies and gents, we routinely stress that we don't believe that we need to abandon the roots of affordability that manufactured homes represent. The U.S. Census Bureau tells us that of the 52,100 new manufactured homes placed in 2012, some 23,100 where single sectionals, American's most affordable permanent housing option.

But that means that the other 28,300 placed in 2012 were multi-sectionals. Consider what the U.S. Census Bureau said in a July 24 2013 press release, quoting:

NEW RESIDENTIAL SALES IN JUNE 2013

“Sales of new single-family houses in June 2013 were at a seasonally adjusted annual rate of 497,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 8.3 percent (±20.5%)* above the revised May rate of 459,000 and is 38.1 percent (±22.0%) above the June 2012 estimate of 360,000.

The median sales price of new houses sold in June 2013 was $249,700; the average sales price was $295,000. The seasonally adjusted estimate of new houses for sale at the end of June was 161,000. This represents a supply of 3.9 months at the current sales rate.”

Let's compare this to the U.S. Census Bureau's May 2013 stats for manufactured housing, which said that the average sales price of our homes was $61,100. So at the current pace, the stick builders have 8.33 homes built for each of our homes built.

There is a reason why we are promoting our more 'residential' homes on ManufacturedHomeLivingNews.com – one being that we need to break past the stereotypes held by most people. But the other is that we have the most opportunity to grow in that residential side of the HUD Code industry!

A careful reading of market facts and reports like this one by Trulia ought to be telling us how we need to adjust, because we have the opportunities and are all-too-often passing them by. We will pick the next part of this Trulia survey soon.

Until then, Open Your Mind to the real potential of our market. Forget what you 'think' you know. Look at the market in broad terms. Think “we can too” – not “limited to.” Think marketing and selling to the more qualified buyers vs. the 'get me done' customers.

Let's not abandon the affordable housing side, but let's expand our reach to where the action in the U.S. is the hottest! This works for our clients, so logic suggests that it can work for you too. ##

PS: Check our many Exclusive and Red HotFeatured Articles for August and see the

L. A. "Tony" KovachL. A. 'Tony' Kovach
ManufacturedHomeLivingNews.com | MHProNews.com |
Business and Public Marketing & Ads: B2B | B2C
Websites, Contract Marketing & Sales Training, Consulting, Speaking:

MHC-MD.com | LATonyKovach.com | Office 815-270-0500 |

Connect on LinkedIN:
http://www.linkedin.com/in/latonykovach 

Start YOUR Free Manufactured Housing Image Campaign, Today!

April 6th, 2013 No comments

We don't require a multi-million dollar national campaign to improve the image of manufactured housing, as nice as it may be to have one. We don't need high dollar Madison Avenue advertising 'gurus' – who don't know our industry – to tell us what we ought to do. We know deep down what needs to be done, even if some may resist it. Improving our image can start in your market with even modest, but valuable steps.

This is my view, but it also happens to reflect what the CEO of high flying UMH, Sam Landy, said:

"People need quality housing at a reasonable price. We provide that. We provide a better product than apartments, townhouses, condo’s and single family homes for our customers. Apartment rents have been increasing. Single family home buyers now need down payments once again.

Given these changes…our sales will be far higher than today’s paltry 50,000 units and may even exceed the old records of three or four hundred thousand shipments per year…I’ve come to the conclusion that we are all responsible for our own marketing. If you want to be a great retailer you have to pay the bill for the marketing. Why should anyone do it for you, and all markets are local anyhow." (Full Sam Landy interview is linked here.)

You may be part of the largest network of manufactured home retailers or communities in the U.S., or the sole proprietor of a modest 'mom and pop' location or anything in between.

You may have longed for a grand TV and multi-media image building campaign, but for whatever reasons, the powers that be did not make it happen. That's all in the past, we have to move on and can so long as you start your own image campaign, now. We can help make some of that happen for you, "free."

Yes, you can.

Yes, in the next few minutes, you will see that it is so easy, you may laugh and wonder why no one has done this before!

Most of the U.S. doesn't have a clue as to how nice a modern manufactured home is, especially how much appeal, quality and value factory builders pack into a residential style HUD Code home.

It is up to retailers, communities and others in Manufactured Housing to show the new reality to the public.

Here is how you do it in YOUR market, as easy as 1, 2, 3.

Step 1, learn to use Craigslist and other similar sites – which are free – the smart way.

Example. Take a multi-sectional or residential style manufactured home you have good quality photos of that has been properly decorated. Place 2-4 of those photos into a very short Craigslist post.

Starting with the summary and headline in Craigslist, you could use something like this:

$73,900 3 Bedroom Builder Must Sell ASAP! Your Town, USA

This is a modern, factory-built home that meets or exceeds all federal construction standards for our market.

"Your lot or ours, one only at this price. Ph XXX-XXX-XXXX."

If you have an MLO number, you could add the words: "Financing available." *

To learn more about modern factory-built homes, go to MHLivingNews.com.

Step 2, keep a post like this going at all times on Craigslist, more than one is better, just make sure they aren't duplicates so you don't get flagged.

The keys are: amazing price (compared to site built) BUT NOT TOO LOW, your phone number and a link to MHLivingNews.com. Don't say too much, less is often more when it comes to lead generation.

Step 3, Patience and persistence! Some home shoppers will have an aha moment early on, some will take repeated exposures and time. Typically, CRM studies suggest it takes some 3-6+ months for good credit customers to make the first contact, because they are shopping carefully. But as more and more housing shoppers stumble onto your offer (because your headline DOESN'T say, 'manufactured home' or 'mobile home,' etc.) some will get curious. Some will eventually reach out, if you treat them properly, some of those will come and buy.

That is how it starts.

The other key to this is that YOU and YOUR location delivery good, honest service and value. Do what you say you will do, so don't over promise, it isn't necessary. More on this and related in a future column.

If you need help with your marketing or training, click here.

Sam Landy's point above is dead on, we have what the public needs in housing! We as manufactured home professionals have to deliver on our potential value. When your location delivers qualify living and what is promised, you will enjoy ever more success.

Some readers will wonder. Why not just use my own company's website for this? Good question!

You can, but there is POWER in having a third party website – independent from your company – to demonstrate and 'prove' the reasons for manufactured and factory built homes. MHLivingNews.com is like a third party endorsement of the manufactured home lifestyle. That is something your website can't easily do solo.

Two of the most powerful and popular pages on the MHLivingNews.com website are our photo gallery and the tornado vs. Manufactured Home video page. Those pages – and so many others that we routinely add to – are not likely on you website. You may not have the time or resources to do all that MHLivingNews does, so just link MHLivingNews.com in your posts, and start the outreach in your market.

MHLivingNews is already getting thousands of page views every month. But Craiglist has millions of page views daily, and many of those are from people seeking a home!

So if even 2% to 5% of every MH Retailer or MH Community location in the country did this simple 1, 2, 3 plan, the traffic would soon be in the ten of thousands. In time that can grow to the hundreds of thousands and then into the millions on MHLivingNews.

A simple 'free' image campaign for YOU and YOUR market! It will spread to others, and everyone in the mix will benefit.

More on this topic later, but you can start this today by taking those 3 easy steps! ##

* While FTC regs seem to permit this, A commentator claiming expertise has suggested that the law on this subject is ambiguous, and it would be prudent to seek specific legal advice before using the words 'financing available,' even if you have an MLO number.

(First Photo Credit: FlickrCC/dislokated, other photos from MHLivingNews.com)

PS: Check our many Exclusive and Red Hot Featured Articles for April and see the

other new stories at MHLivingNews.com too.

l-a--tony-kovachL. A. "Tony" Kovach

MHLivingNews.com=Re-Discovering and Spotlighting the MHLifeStyle

MHProNews.comMHMSM.com = Industry News, Tips and Views Pros can Use

Services:B2BandB2CAds, Proven MH Marketing & Sales Systems, Websites other Industry Solutions.

Office –815-270-0500

latonyk@gmail.com or tony@mhmsm.com

www.MHC-MD.com

http://www.linkedin.com/in/latonykovach= connect with me on Linkedin.

http://pinterest.com/latonyk/manufactured-home-lifestyle/

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Whether you think you can or whether you think you can't, you're right. – Henry Ford