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Investors, Heartbroken Home Owners, Site Building Giant DR Horton, and Manufactured Housing

July 12th, 2018 No comments
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Photo of a D.R. Horton Home model in MD. 

Investors: D.R. Horton, Inc., America’s Builder, has been the largest homebuilder by volume in the United States for thirteen consecutive years,” says the publicly-traded company’s website.

 

Their website provided the following data, linked here.  The screen capture below is just part of that fact sheet.

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Click here or the image above to download the full size fact sheet.

 

Horton sells more than half the total number of housing units annually sold by the entire manufactured housing industry, and obviously at a far higher average price-point.

A report in Oct 2017, said their sales total in 2016 was $12.3 billion in revenues.

That’s more than double the retail sales total for all of the HUD Code manufactured homes sold in 2017 by the manufactured housing (MH) industry. The latest MH data can be reviewed later, at the link below.

Manufactured Home Shipments, State by State Breakdown, May 2018 Official HUD Data

Why does any of this matter to MHVille?

Fair question, let’s look.

 

The Site Built Housing Industry Reality Check  #1

ABC News did the following exposé of the host of problems found in the conventional housing industry.

This isn’t new, there are numerous other similar reports.  Check out this short one by a local news report.

 

These are similar to the kinds of problems that caused the old pre-HUD Code mobile home industry’s leaders to turn to the federal government and ask for federal standards.  Problematic pre-HUD Code mobile home builders in the early 1970s caused the builders of better homes NOT to want to be branded by those with a poor image.

The ‘quality crisis’ of the late 1960s and early 1970s led to exposés by CBS’ 60 Minutes and others.  That threatened the credibility of the then-booming mobile home business.  Are site builders heading toward a similar crisis? And will manufactured home producers, marketers and sellers be able to tap into those concerns?

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What was accomplished previously in sustainable shipment levels, can clearly be done again.

D.R. Horton is far from alone in facing such concerns among conventional, on-site builders.  There have been numerous websites over the years – example, http://www.kbhomesleak.com/kb-home-sucks-1-gone/ – that spotlight these kinds of problems with other stick builders.

The point here isn’t to trash D. R. Horton, nor any other, conventional housing builders.

Rather, it is to make a few points similar to what the National Association of Home Builder (NAHB) official interviewed in the ABC News video above made.

Namely, that housing isn’t perfect.

No product is, and that includes manufactured homes.

So why is it that conventional housing is roaring, and manufactured home shipments are snoring?

ConstructionofModestsizedHomesRemainsLimitedHarvardJCHS2018ManufacturedModularHousingDailyBuisnessNewsMHPronEws

The only JCHS graphic that specifically mentions manufactured housing. To see our exclusive review of the Harvard’s “State of the Nation’s Housing in 2018, click here or the graphic above. 

Part of the beauty of manufactured homes is that there are third-party inspections. Those avoid many of the kinds of problems being identified by site builders, noted in the videos above.

HUD Code manufactured housing consumers can take comfort in that inspection process. Furthermore, the dispute resolution process that is part of the Manufactured Housing Improvement Act of 2000 (MHIA) gives consumers a level of confidence that is frankly not found in the conventional housing world.  The MHIA of 2000 is found in the article linked below, along with other information that can be read later for greater depth of understanding on a related topic.

Two Great Laws Already on the Books NOW,  Can Unlock Billion$ Annually for Manufactured Housing Industry Businesse$, Investor$

Unlike many conventional builders, manufactured home producers are all third-party inspected. And the review process – per HUD data reveals – so few consumer complaints that it should make all manufactured home sellers proud.

The article from MHLivingNews last year spotlighted the relatively few numbers of dispute resolution complaints on HUD Code homes.

Federal Data Spotlights Manufactured Home Industry Quality, Regulatory Questions

There are so many ways to make the points to consumers that today’s manufactured homes are a good investment.

It should be noted that Horton Homes, a manufactured housing company that was based in Georgia, was not connected with D.R. Horton.

Per References for Businesses, “…the publicly-owned D. R. Horton construction firm, based in Dallas, Texas, is an entirely different company…Horton [Homes] had played a part in improving the industry’s prestige, however. For years, jokes had persisted about manufactured housing–or rather trailers, sometimes nicknamed “tornado bait.” The homes had been considered to be shoddy, unattractive, substandard, and (in the case of a tornado or even of high winds) unsafe. Starting in the 1970s, however, that began to change. In June 1976, the United States Department of Housing and Urban Development (HUD) set new safety standards for mobile home construction. In the wake of hurricanes Hugo (1989) and Andrew (1992), HUD increased its requirements, declaring that manufactured homes should be able to withstand winds of 110 m.p.h. Horton [Industries] decided that his own product should meet even higher standards, and in 1997 the Atlanta Business Chronicle reported that some Horton Homes could sustain winds of 135 m.p.h.”

 

As an interesting side-note, Texas-based Legacy Housing, Inc. states that it purchased Horton Industries manufactured housing production facilities in Eatonton, GA in a January 2016 statement.

 

The Stick-Builder Horton Website Says the Following

About D.R. Horton, Inc.

D.R. Horton, Inc., America’s Builder, has been the largest homebuilder by volume in the United States for sixteen consecutive years. Founded in 1978 in Fort Worth, Texas, D.R. Horton has operations in 79 markets in 26 states across the United States and closed 48,731 homes in the twelve-month period ended March 31, 2018. The Company is engaged in the construction and sale of high-quality homes through its diverse brand portfolio that includes D.R. Horton, Emerald Homes, Express Homes and Freedom Homes ranging from $100,000 to over $1,000,000. D.R. Horton also provides mortgage financing and title services for homebuyers through its mortgage and title subsidiaries.”

 

The D. R. Horton Takeaways for Manufactured Housing?

There are numerous top-line takeaways for manufactured housing in the D. R. Horton story. The Daily Business News on MHProNews will point to only one this morning.  It’s this.  There is a need for all true leaders in the manufactured home industry to stand up and fight for the reputation of their industry.

D. R. Horton proves you can have significant issues, and still be wildly more successful than those in our industry are today. D. R. Horton’s quality concerns arguably dwarf those of manufactured housing. D.R. Horton aggressively markets their product.

If that is obviously so, then how is it that on something as apparently simple as the use of proper terminology about manufactured homes, the MH Industry can’t get the media to get that right?  How can it be that 42 years after the first HUD Code homes were built, that the industry’s big corporate leaders can’t get many in the media to use the correct nomenclature?

Proper Definitions, Mobile Home, Manufactured Home, or Trailer House – Civil Rights, Respect, Public Policy, & Value Issues

See the related story, linked above.  The public focused story on D.R. Horton, is linked below.

Exposé! Heartbroken Conventional Housing Buyers? Dare to Compare Site Built with Modern Manufactured Homes

That’s this morning’s look at “News through the lens of manufactured homes, and factory-built housing.” © “We Provide, You Decide.” ©  ## (News, analysis and commentary.)

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

Related Reports:

“Why Advocates Need to Rethink Manufactured Home Quality,” Harvard, GSE, Genz, “High Satisfaction”

 

“Take the MH Advantage Challenge – Can You Tell the Difference?” Fisk of Sarah Edelman, Director of Duty to Serve, Single-Family Mortgage Business for Fannie Mae

 

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Manufactured Housing – “Giants vs. Independents” – Tunica Talk – “You’ve Got to See This”

March 22nd, 2018 Comments off

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An independent manufactured home retailer walked up to the Daily Business News team in Tunica Wednesday to say, thank you” for the depth of coverage of the industry’s news.

A HUD Code home producer said, “I wish you’d tone it down a bit,” on the controversies, while expressing “appreciation for the unrivaled coverage of industry events not found anywhere else” in the manufactured home industry’s trade media.

Another independent retailer and his family approached the MHProNews squad during the lunchtime hospitality. He wanted to give his family and team members a chance to discuss what’s been taking place on finance related issues, such as the Government Sponsored Enterprises (GSEs) Duty to Serve (DTS).

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A long-time Manufactured Housing Institute (MHI) member said, “you [MHProNews] were right about HUD, Pam Danner, and Lois Starkey,” but took exception to the controversy surrounding the so-called “new class” of manufactured homes that MHI is promoting.

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Meanwhile, a veteran factory-built housing professional that had previously been “open minded” about MHI’s project for a “new class” of manufactured homes has after reading and doing his own research, turned against the plan (see Related Reports, linked below, for more details about these hot topics, plus more from the 2018 Tunica Show).

Rephrasing, the comments and reactions to the industry’s issues have run the gamut. From management team members in the industry’s biggest companies, to mom and pop operations and all others in between, the data and engagement reflects the pragmatic respect given to this MH Industry trade media resource.

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We are not wearing bold branded t-shirts, ball-caps or neon signs in Tunica. Part of what’s noteworthy is that lacking any identification of MHProNews other than the Tunica Show’s badge – which the wind routinely whips around – many professionals are eager to engage and express their views to the manufactured housing industry’s most popular and independent trade news.

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You’ve Got to Read This…”

Walking through a display model for a new HUD Code producer, a retailer and his colleague from Texas engaged with us. “I used to forward your news emails to” his partner, with the message – “You’ve got to read this.”  Then he shared later email news updates, saying, “You’ve got to see this and read this one too.” That went on for some time, until his colleague signed up for his own email news.

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That same Texan said “We’re giving the giants a run for their money” in his market area.

They were looking for a non-Clayton producer to buy new homes from. “Why?” was our question. “Because of the issues raised in stories you’re reporting on, like the long-lead times” post-Harvey in Texas.

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You sure do keep it stirred up,” opined a straight-faced industry professional, who paused – adding “keep it up – followed by a slight smile.

Tony, I read every emailed news update, from top to bottom” said another retailer, with exhibitors and community professionals often saying something similar.

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Upbeat, But Aware…

Attendance is up slightly over last year, say show sources.

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Independent producers are becoming more aware than ever of the trajectory of the industry, the causes of that trend, and are taking steps to address it, say industry sources.

Rain on Tuesday didn’t dampen traffic in the display homes, said several manufacturing exhibitors.  Wednesday was windy, but warmer and sunny.  Traffic in the homes was brisk.

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Tamas Kovach (pronounced like “TahMash CoVatch), is part of the MHProNews MHLivingNews family, with a Tunica Show attendee. Numerous such photos are taken during the course of the event.

The mood of attendees has been overall upbeat, association executives, and exhibitors told the Daily Business News. Comments from attendees made directly to the MHProNews confirmed those observations.

We’re more upbeat about the industry in some ways, but we are also more aware of the trajectory of the industry toward consolidation,” said an attendee.  “Those who don’t plan according to reality are in denial.”

HamiltonHomesNewHUDCodeManufacturedHomeBuilderTunicaShow2018DailyBusinessNewsMHProNews

 

Everyone Knows Your Name…

As one attendee said after another industry mom and pop couple stopped us to say hi, “It’s like a line out of the TV comedy, Cheers – where everyone knows your name.

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Stopping to chat with industry professionals in Tunica, happy to have their photos shared.

Your son is getting taller, and stronger” said one after getting a hand-shake from Tamas Kovach.

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The industry’s professionals “are hungry for real news, not happy talk” explained a factory-producer.

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Note: the photos are randomly placed, and should not be construed to match the commentary.

One attendee pointed to stacks of a new trade publication in high-visibility racks near the exhibit hall.  They appeared to be untouched.  “It’s not ‘rah rah’ that will help a company navigate the challenging waters of the industry,” said an exhibitor.

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There are several websites and trade media that are de facto surrogates for MHI ‘news,’ per industry sources.  Those media routinely have far less engagement from the industry than what readers say is our “hard-hitting coverage on issues that matter to investors and professionals.” The proof is shown dramatically in images like the above. Racks like this posted near the entrance of the exhibit hall looked untouched, with every glossy magazine going unread. MH professional readers vote with their time, browsers and engagement – or lack of engagement.

The feedback in many ways confirms what calls and messages to MHProNews between events likewise reflects.

TinyHomesLegacyManufacturedHOusingIndsutryDailyBusinessNewsMHProNews

Naturally, not everyone agrees with everything that is spotlighted by our pro-industry publications. But reader feedback, along with analytical data, reflects the dominance of MHProNews over other trade mediaCandid, fact-base reports and analysis are reasons routinely cited by pros.

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The quality and appeal of today’s manufactured homes continues to rise. While prices are going up, so too are costs for conventional housing, so the percentage savings for a consumer buying a manufactured home vs. conventional housing remains favorable and strong. A rep from Fannie Mae told MHProNews that as a newcomer to the industry’s product, he is impressed with the quality and value. 

SunshineHomesRedBayALManufacturedHousingINdustryDailyBusinessNewsMHProNewsTunica2018

A post-Tunica report will be coming soon, which will break new ground on issues ranging from:

  • manufactured home lending,
  • association related,
  • new class of homes,
  • ongoing “consolidation” of the industry – and possible steps to address that challenge,
  • HUD and regulators at all levels,
  • marketing, sales, and image related issues, plus more.

SunshineHomesRedBayALManufacturedHousingIndustryDailyBusinessNewsMHProNewsTunica2018Show

It’s part of manufactured housing’s leading Industry News, Tips and Views Pros Can Use.” ©

The Tunica Show in 2018 has thus far confirmed what the Louisville Show did earlier this year. With the affordable housing crisis raging, how is it possible that the manufactured home industry sunk to such a low ebb?  Why are HUD Code manufactured homes  only rising slowly from it’s bottom in 2009?

It was summed up late last year by an industry executive, who said. “Tony, if MHProNews is writing about it, I want to know about it.” ## (News, analysis and commentary.)

Related:

DUTYtoServePaulBarrettoFannieMaeManufacturedHousingIndustryDailyBusinessNewsMHProNews550

Finance related news was made Tuesday in Tunica, click the image above or the link here to learn more.

Tunica Manufactured Housing Show, Photo Report, Day One

Tunica, Nashville Trade Shows and Manufactured Housing Glory Days

Manufactured Housing Association for Regulatory Reform Demands Clarification on “New Class” of HUD Code Manufactured Home

4 F’s and True Believers

4 Concerns of Homebuilders Have Impacting Every American

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

ThereAreOnly2WaysToLearnOwnOthersExperiencesLATonyKovachManufacturedHousingIndustryMHProNews-575x235By L. A. “Tony” Kovach,
award-winning consulting, publisher, web, video, recruiting, sales training, business development service provider.

MHLivingNews.com | MHProNews.com | Office 863-213-4090 |

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

 

Legacy Homes Assumes Production in Facility Abandoned by Horton Homes

March 11th, 2016 1 comment

Georgia___eatonton__wmaz__cedit__Legacy_Homes_akes_over_abandoned_MH_plantLegacy Homes has taken over production of manufactured homes (MH) in a facility in Eatonton, Georgia that had been occupied by Horton Homes, according to what wmaztv tells MHProNews.

Seventy employees have begun working there, and the CEO says they can handle up to 250 to 300 workers on one side, and could duplicate that on the other side if business picks up sufficiently to warrant more workers.

A manufactured home starts on its frame a quarter mile away at the back. Within a day-and-a-half, it arrives finished at the front. The production rate could increase to eight to ten homes a day when the plant is at full production. ##

(Photo credit: wmaztv–Legacy Homes plant in Eatonton, Georgia)

matthew-silver-daily-business-news-mhpronews-comArticle submitted by Matthew J. Silver to Daily Business News-MHProNews.