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NAR’s Lawrence Yun Raises Alarm for New Housing Crisis, MH Import?

May 30th, 2018 Comments off

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The housing industry today is facing a different kind of crisis:
not enough homes for sale
.”
– Lawrence Yun, Forbes Contributor.

 

A decade ago, the housing sector was in a mess. The mistakes of easy subprime lending resulted ultimately in the catastrophic collapse of the housing sector. Home values collapsed by a third nationwide, and the inventory of unsold homes spiked to unprecedented heights. Miami, for example, at one point was said to have 30 years of housing inventory.” – said Lawrence Yun, Forbes contributor and chief economist for the National Association for Realtors (NAR).

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Fortunately, after many years of sobering up, with proper lending and consistent job creations in the economy, the housing market has regained some health, with higher home sales and a very low foreclosure rate. However, the industry today is facing a different kind of crisis: not enough homes for sale,” Yun wrote just days ago.

5PointsToBoostHousingYunNARMay2018ManufacturedHousingIndustryDailyBusinessNEwsMHproNews

The inventory of homes on the market last year in 2017 was one of the tightest ever. In early 2018, it is even worse. In the first quarter, the number of homes on the market averaged 1.59 million, which is down 8.4% from the same period one year ago,” Yun stated. “Strictly focusing on single-family home listings, this is the lowest inventory since the tracking of the data from the early 1980s.”

GoodEconomyJobUnempoyemntHighStockHighNetWorthWagesRisingYunNARDailyBusinessNewsMHproNews600

This acute housing inventory shortage has fired up home prices. The median home price has risen by 40% in the past five years and is still rising strongly, with a 6% annualized gain in March. Such a rapid gain in home values at a time when wages are rising by only 2% to 3% a year is measurably cutting into affordability. With the Federal Reserve set to raise its short-term interest rates several more rounds over the next two years and unwind some of its prior asset purchases, longer-term interest rates, including that of mortgages, will surely rise and hence further hamper affordability,” the NAR economist stated.

HomePriceExpectationYunNARMay2018ManufactuerdHousingIndustryDailyBusnessNewsMHProNews600

Interestingly, though, home-buying demand remains super-robust. The steady build-up in household formations following the recession continues. Many of the new households have not purchased a home, as evidenced by the still historically low homeownership rate,” Yun explained, adding, “Pent-up housing demand, therefore, is large.”

LawrenceYunNARShort8.3MillionHousingUnitsRisingRentsHousingPricesCuredOnlyByMoreBuilding

Not New, but Important to MHVille

The Daily Business News has reported on Yun’s keen real estate and housing insights for years.

His previously published statements include the quote below, where he says that builders must get busy to get beyond the current housing crunch.

This ought to be a no-brainer for factory-built housing professionals.  But due to years of several different internal industry issues, coupled with regulatory challenges, and public perceptions, manufactured housing has been kept at historically low ebb.

Now, emerging technology could be poised to supplant modular and some of the potential output of manufactured housing industry professionals (see related reports, further below.)

MostMenAppearnNeverConsideredWhatHouseIsNeedlesslyPoorAllTheirLivesHenryDavidThoreauManufacturedHomeLivingNews

For newcomers to the website not familiar with modern manufactured homes, learn more by clicking the image above or the link here.

The realities undercut some of the logic that the Manufactured Housing Institute (MHI) Ducker Worldwide concepts have called for, and their so-called “new class” of manufactured homes.

The image issues from an ongoing series of largely unrebutted industry issues rounds out the problems faced by manufactured housing.

Part of the opportunity-in-disguise must be the investment by industry pros at the location level of the time, talent, and treasure to tap the opportunities provided by an 8.3 million affordable housing units needed.

Another element of the solution ought to be the establishment of new, post-production representation of the independent companies of the industry.

The Ultimate Manufactured Home Industry Fact$, Data, and Insights – Bullets plus at-a-Glance Infographic

What arguably won’t work is more of the same.  The status quo on a range of issues has led the industry’s homes to the status of 3rd, 4th or 5th choice housing for millions.  When the industry’s quality is better than its ever been, it is incongruous.

Yun’s recent presentation of 2018 housing data, from which the slides above are taken, is found at the download linked here. “We Provide, You Decide.” © ## (News, analysis, and expert commentary.)

(Third party images, and cites are provided under fair use guidelines.)

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HUD Secretary Ben Carson Praises Manufactured Housing, and the Manufactured Home Industry’s Importance to Solve Affordable Housing Crisis

April 26th, 2018 Comments off

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The “U.S. Department of Housing and Urban Development (HUD) Secretary Ben Carson reaffirmed his commitment to reforming the Department’s manufactured housing program,” said the IMHA in a statement to the Daily Business News.

 

Secretary Carson stated the importance of manufactured housing as a source for addressing the nation’s affordable housing crisis and that HUD’s approach to the regulation of manufactured housing should change,” the Indiana state association said.

According to the economists, we are experiencing the biggest jump in housing prices in four years – prices are rising while the supply of housing is getting smaller. It’s basic supply and demand,” said Secretary Carson, M.D.  “That’s why everyone in this audience and the manufactured housing industry is so important – and that’s why I am here today.  You are a big part of the solution to providing unsubsidized, quality, affordable housing.”

The comments echoed what he said recently to a Senate oversight hearing in the video, posted below.

Secretary Carson said, “HUD is now positioned to usher in a new era of cooperation and coordination with your industry.  Make no mistake, we understand how you are vital to our economy and to our agency’s goal of making safe, quality, desirable and affordable homes for millions of hard working Americans.”

 

Secretary Carson recognized the work the industry is doing to make homes more affordable, while creating good jobs.

Secretary Carson noted that the Trump Administration appreciates all the efforts underway in the industry, specifically citing the use of a number of American suppliers and products when constructing manufactured homes.

Unlike his predecessor, Secretary Julian Castro who appeared at an MHI event via video, Dr. Carson made a personal appearance at the Manufactured Housing Institute (MHI) annual meeting in Las Vegas. The Trump Administration has been widely seen as more business and regulatory friendly than prior ones. ## (News, analysis, and commentary.)

NOTICE: Exclusives from HUD, and Attendees about Secretary Carson’s comments at MHI will be part of an upcoming report. Sign up for our emailed news updates for that notice, and to stay up with all of the industry’s most popular, best and most independent fact-based converge.

(Third party images are provided under fair use guidelines.)

Related Reports:

“Move, Open, Live” De Rose Industries & Senator Thom Tillis’ Mobile Home Comments

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Ending Sales Tax on Manufactured Homes, Law Center – Which Praised MH Quality, Importance

April 9th, 2018 Comments off

EndingSalesTaxPraiseForImportanceofManufacturedHomesLawCenter

Contrary to popular belief, manufactured homes aren’t less expensive than site-built homes because they are “lower-quality” homes, they are just built in a more cost-efficient and innovative way.”

 

Who says?

Kristopher Grant is a policy analyst at the Colorado Center on Law and Policy.

Land costs notwithstanding, producers of manufactured homes make a quality, affordable option, at less than half of the price per square foot than conventional homebuilders,” says Grant.

Grant, in an Op-Ed to the Denver Post, makes the case for repealing state sales tax on manufactured homes.

Unfortunately, a significant financial barrier can make the acquisition of new manufactured homes more difficult to obtain: the state sales tax,” the policy analyst said.

Grant notes in part that sales tax is indirectly packaged wrapped into the price of conventional housing too.

KrisGrantBioColoradoLawPolicyCenterDailyBusinessNewsMHProNews

Importance for Affordable Housing Buyers

Under Colorado state law, new manufactured homes are considered personal property (think cars and television sets) and thus subject to the state sales tax at the time of purchase. Granted, only a portion of the value of the home is taxed, but for an average priced home that still amounts to roughly $1,000. In addition to the state sales tax, manufactured homeowners also pay their annual property taxes and are thus double-taxed in practice,” Grant said.

He compares that to site builders, who “On the flip side, those who build conventional, site-built homes pay sales tax on the building materials and ultimately build those costs into the final price of the home, increasing the overall value of the home to the eventual owner.”

Colorado’s jostling over sales taxes is nothing new for the industry, which sees periodic moves in various states to raise or lower them. But does eliminating them entirely signal a possible new for states who want to encourage affordable home ownership?

Grant says that “Fortunately, a bill being considered by state legislators seeks to remove this financial barrier…[Colorado] House bill 1315 would exempt the purchase of a new manufactured home from the state sales tax.”

While HB 1315 would result in a modest revenue reduction over time, this exemption is directly targeted at those Colorado families already struggling to stay ahead. This is money they will be able to spend on child care, groceries, a college savings account and their new home loan,” said the analyst.

In 2017, 937 Coloradan families purchased a new manufactured home. These families saved up their earnings, got their credit scores in order and made the financially responsible decision to purchase a home and an asset. Let’s encourage more Coloradans to do the same by passing HB 1315 and bring manufactured housing into the larger affordable housing discussion in this state,” concluded Grant.

With most states concerned about their budgets, it would be an uphill fight.  Colorado will be an interesting test case, as the influx of revenue from legalized pot-sales might, might make it easier to accomplish there.  If one state relents on sales tax on manufactured housing, others could follow suit.

Time will tell… but one thing is certain. It is one more indicator that manufactured housing, properly understood, is a non-partisan issue. ## (News, analysis, and commentary.)

(Third party images provided under fair use guidelines.)

Related Report:

“Move, Open, Live” De Rose Industries & Senator Thom Tillis’ Mobile Home Comments

Consulting, Marketing, Video, Recruiting, and Training Resources

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Manufactured Housing’s Latest Production Stats, Import for Industry, Investors

January 8th, 2018 Comments off

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The following press release was provided to the Daily Business News, which will be followed by a brief analysis and commentary, with some related links.

 MANUFACTURED HOUSING PRODUCTION UP IN NOVEMBER 2017

Washington, D.C., January 5, 2018 – The Manufactured Housing Association for Regulatory Reform (MHARR) reports that according to official statistics compiled on behalf of the U.S. Department of Housing and Urban Development (HUD), year-over-year manufactured housing industry production grew once again during November 2017. Just-released statistics indicate that HUD Code manufacturers produced 8,602 homes in November 2017, a 21.1% increase over the 7,098 HUD Code homes produced during November 2016. Cumulative industry production for 2017 now totals 85,657 homes, a 15.5% increase over the 74,141 HUD Code homes produced over the same period in 2016.

A further analysis of the official industry statistics shows that the top ten shipment states from the beginning of the industry production rebound in August 2011 through November 2017  — with cumulative, monthly, current year (2017) and prior year (2016) shipments per category as indicated — are:

CummalitiveManufacturedHousingProductionChartNov2017Top10StatesMHARRDailyBusinessNewsMHProNewsThe Manufactured Housing Association for Regulatory Reform is a Washington, D.C.-based national trade association representing the views and interests of independent producers of federally-regulated manufactured housing.

-– 30 –

Last month’s report is linked below.

Latest Manufactured Home Shipment Data, for October 2017 Released

The industry needs to look at such statistics through a dual lens.

First, it naturally a good thing that the industry is witnessing rising shipments since it hit bottom in 2009.

 

NAR’s Yun – No Quick Fixes Spell$ Manufactured Housing Opportunitie$

Second, the industry is only scratching the surface of its potential. 

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If the Manufactured Housing Institute (MHI) had the visions and solutions that they claim, would the industry have experienced the kind of slides and slow recovery witnessed since 1998?

Historically and in the future, the industry did more, and could do roughly 10 times (+/-) better than it currently is in terms of new home sales.

ManufacturedHousingIndustryShipmentsFEMAManufacturedHomesNotMobileHomesTrailersIndustryResearchReportsDataMHProNews

NAR says there are 8 million new housing units needed. Site builders can achieve the needed numbers, but factory builders – given the vision and commitments needed – can. Credits, MHI, Cavco.

With over 8 million new housing units needed now, and conventional construction unable to meet those needs in terns of speed, price, quality and volume, investors ought to be salivating of the potential in manufactured housing.

MultipleReasonsExpectManufacturedHousingDoBetterThanSiteBuiltHousingEricBelskyEecDirJointCenterHousingStudiesHarvardUnivDailyBusinessNewsMHProNews

At the time Belsky made this prediction, manufactured homes (MH) were selling over 250,000 new units per year. This year, MH won’t reach 40 percent of that total. What happened?

Appealing Manufactured Housing Institute (MHI) Marketing, Finance Booklet Reviewed

That said,  there are also several warning signals and possible rivals to the industry that professionals must grasp, and cross.

Trends in MH Communities, Impacting Producers; Looming Crash?

While Manufactured Housing Overall Rises, Some Slip Sliding Away

Properly understood, each of the issues can be navigated with the correct effort.

Is their proof for that claim?

Yes.

Because there are companies growing at more than double the rate of the industry at large, and individual locations growing at more than 4 times the rate of the industry at large.

KYPs, and the $64 Billion Dollar Question-Monday Morning Manufactured Housing Sale$ Meeting

Finally, the potential could be tapped by others, it won’t simply fall into manufactured housing’s lap.

$58,000 PreFabs, Videos, Updates of More Hi-Tech Backers

So, the industry’s potential must be approached as a mid-to-longer term move.

Survey Top 2017 PreFab, Modular, Tiny and 3D Printed Housing News Stories

Manufactured housing isn’t a fast buck.  That’s a key lesson from Warren Buffett, who took the long term view.

Warren Buffett, “the Moat,” Manufactured Housing, Berkshire Hathaway, Clayton Homes, 21st Mortgage, Vanderbilt, Wells Fargo, NAI…

Beyond Skyline/Champion Merger, What’s Next in Manufactured Housing? Plus MHMarket Update$

But it’s a sure buck for those who know what they are doing, and are wiling to invest the time, talent, and treasure to mine the opportunities. ## (News, analysis, and commentary.)

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Senator Tim Scott, Sec Mnuchin, Politico, Bloomberg on Tax Reform’s Hurdles, Importance

October 18th, 2017 Comments off

SenatorTimScottR-SCHarrisFalknerFoxTaxReformDailyBusinessNewsMHProNewsThe top 20 percent of the people pay 95 percent of the taxes. The top 10 percent of the people pay 81 percent of the taxes,” U.S. Treasury Secretary Steven Mnuchin told Politico.

So when you’re cutting taxes across the board, it’s very hard not to give tax cuts to the wealthy with tax cuts to the middle class. The math, given how much you are collecting, is just hard to do,” Mnuchin said.

The Daily Business News has been reporting on the push by the National Association of Manufacturers (NAM) and the National Federation of Independent Business (NFIB).

The Manufactured Housing Institute (MHI) and the Manufactured Housing Association for Regulatory Reform (MHARR) have not taken a public position on tax policy.  informal surveys of industry members suggest that the notion is popular among many industry business owners.

In his interview,” per Bloomberg, “Mnuchin also defended the framework’s call for repeal of the estate tax, which applies to estates worth at least $5.49 million per person.”

 

Why should people have to pay taxes again when they die?” Mnuchin said, per Bloomberg.The Treasury chief gave an “absolute guarantee” that Trump would sign a tax bill by the end of 2017.”

Fox News’ Harris Faulkner interviewed GOP Senator Tim Scott, (R-SC) in the video, below. Scott is seen by many as a rising star in the GOP.

As MHProNews noted in today’s industry market report, “The economy is moving in a healthy direction.  So says Stifel’s Hans Olsen, who gives his 18 to 24 month market projections and insights.”

The update added this pragmatic, cautionary note. “Here on the Daily Business News market report our take is nuanced.  Growth is a natural result of the right policies, and other conditions. If meaningful tax reform gets passed, the market recovery can be sustained, or may accelerate.  Without that, even voices in the Trump Administration admit the markets could turn if the anti-tax reform segments win the battle now underway.”

Among those voices that admit that the markets could sour without passing tax reform?

Steven Mnuchin. See the videos, from across the left-right political divide. “We Provide, You Decide.”  © ## (News, Analysis.)

(Image credits are as shown above, and when provided by third parties, are shared under fair use guidelines.)

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