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The IBISWorld Controversy and the Manufactured Housing Industry

April 13th, 2011 3 comments

Exclusive MHMSM.com Industry In Focus Report

The March 2011 IBISWorld report that cited manufactured home dealers as a ‘dying industry’ has made news inside and outside of the manufactured housing industry. MHMSM.com has contacted a variety of Industry leaders and personalities from coast to coast to get their comments. On-the-record comments have included national association leaders, as well as professionals in factory-built housing from the manufacturing, retail, communities and lending sectors.

Messages, comments and calls to MHMSM.com from manufactured home industry professionals dribbled in at first, and then gained in volume as publications such as The Atlantic and Business Insider covered the IBISWorld report. As an example of mainstream media coverage, a TV station in Houston reportedly called a regional firm to interview them about the developing IBISWorld story.

Derek Thompson, associate editor at The Atlantic, penned a commentary that included these words:

“At the center of a perfect storm of boomer burnout, a brutal recession,
and a rapidly changing industry, the mobile home retail market
could be the worst industry in America. Here’s why.”

Photo from The Atlantic
Photo from The Atlantic

“If I asked you to name America’s least fortunate industry, your mind might go to record stores, obliterated by on-demand apps; or photofinishers, left in the cold as digital cameras turn Americans into our own photo editors; or fabric makers, where business is booming … in Shenzhen, China.

“But when it comes to unlucky industries, it’s manufactured home (aka mobile home) retailers who really hit the trifecta. First they missed out on the housing boom. Then they felt the gut-punch of the recession. Now they might yet miss out on the recovery. That makes them America’s fastest dying industry, according to a new report from IBISWorld.”

Paul Bradley with Resident Owned Communities USA (ROC USA) was one of the first in the manufactured housing world’s leadership to publicly respond to this IBISWorld report. Bradley wrote a feature article for MHMSM.com that analyzed the IBISWorld report. Quoting from Bradley’s analysis:

“The (IBISWorld) report states ‘demand is dwindling’ and ‘sales are stagnant because the industry is not innovating, and that sales are likely to continue falling in the coming years.’ They go on to say, ‘Manufacturers have made cosmetics changes to manufactured homes, but they have not been significant enough to alter their life cycle stage.’ The report puts MH retailers in the ‘Industry stagnation’ category of declining industries.

“Are you kidding me? These are ‘deeply researched answers’?

“First, the headline clearly comes from their marketing division as a means of grabbing headlines. The research is not about a dying industry but a declining industry segment – one of two long-standing distribution channels in the business.

“With MH shipments in 2010 at 50,000 or 20 percent of 2000 levels, it’s not news that retailer revenues over that period declined. On that data, I’m surprised establishments are not down more than 56 percent. It suggests that the segment has excess capacity and additional closings are likely.

“Most surprising to me is laying the blame at the feet of manufacturers on the issue of design! From a ground-level market vantage point, that’s misplaced.

“The industry’s great declines came about as a result of, first, an industry-created chattel collapse where the seeds were sown in run-up to the 373,000 shipments in 1998. The collapse, and the repossession overhang which followed, began the decline like a skilled boxer’s well-placed left jab.

“The right overhand came next in the form of aggressive sub-prime and predatory lenders in the site-built market. In that run-up, traditional MH buyers – who were harder to finance for MH as a result of the chattel collapse – were lost to site-built housing in an eerily familiar boom market.

“Dazed by the right hand blow to our collective heads, the left to the body that has people reeling now is the regulatory reaction – the SAFE act, etc. – to the clearly consumer-eating lending practices of the last decade.

“The results of this three punch combination are declines of the magnitude widely reported and felt, and like a good whack, the pain lasts a while.

“Innovation in housing design, however, is not the industry’s chief failing.

“For those of us in the community market segment, in fact, innovation in new homes is a small issue – not a non-issue but a mere shadow of the aforementioned home financing issue. In fact, we are seeing demand for replacement and in-fill homes but only where we are able to arrange decent home financing. People want more efficient homes and the cost savings with new EnergyStar homes can be dramatic based on buyers with whom I’ve spoken.”

(Editor’s Note: The complete analysis by Paul Bradley can be found at this link.)

Other commentary in the form of articles proposed for publication, private and public comments followed. Thayer Long at the Manufactured Housing Institute issued this email as part of his response:

“State Execs & MHI Board:

“A very well articulated response to the IBIS report from last week by Paul Bradley which was just posted on www.MHMSM.com.

“I’d also just add that the sentiment at the Tunica Show, the Louisville Show, and the expected strong turnout at the Congress & Expo and the Tulsa Show and York Show later this month certainly don’t indicate this industry is going anywhere.

“Tony/Paul – I hope you don’t mind me sharing. We’ll see you in Las Vegas. Thanks for your support.

“Thanks-

“Thayer”

MHMSM.com spoke with Danny Ghorbani at the Manufactured Housing Association for Regulatory Reform (MHARR) and to Thayer Long at the Manufactured Housing Institute.

Danny Ghorbani stated in a telephone interview that his comments were not the official position of MHARR, but represented his own views on the IBISWorld report and related.

Ghorbani stressed that the IBISWorld report represented the “failure” of “the post-production sector of the Industry” [meaning, MHI] in “serving that segment of its membership.”

The MHARR official then referenced two previously published documents that do represent MHARR’s official position, which were previously published on MHMSM.com in August and October 2010. These MHARR Viewpoint articles called for ‘the post-production segments’ of the manufactured housing industry to form their own national association; a thinly veiled vote of no-confidence from MHARR towards MHI.

MHMSM.com spoke extensively with Thayer Long at the Manufactured Housing Institute (MHI). The typically soft-spoken Long was quick to respond.

Long was at times tongue-in-cheek, at other points direct in his comments about the IBISWorld report and Ghorbani’s often pointed comments on the matter. It should be stressed that Long’s comments, which follow, should be viewed as his own, and not necessarily reflective of the official view of MHI.

In an exclusive interview with MHMSM.com, Long shared the following thoughts:

Thayer Long:
“If it is a dying industry, then ok, then I guess I quit! And if Danny wants to blame it on us [MHI], okay, what else is new? … I am still struggling to figure out what he (Danny Ghorbani) is doing right now. Name one thing that he has accomplished … in the past three years? What has he accomplished…? I would love for you to think about that and get back to me. What has he accomplished? We [MHI] win and lose some battles. But at least we try. We have accomplished some things. Except, except, except… [MHARR]…nothing….

READ THE FULL INDUSTRY IN FOCUS REPORT

Tunica 2011 Summary

April 4th, 2011 No comments

I have to admit that originally I wasn’t planning on attending Tunica this year, but I got an advance scouting report from Rob Greenlee at Ascot Draperies and he said it was looking like a show worth seeing. He was right – after touring the homes and talking to a lot of the attendees, it really felt like Tunica could be a turning point for our industry.

Tunica has always been a special show for me – 9 years ago I met the Patriot Homes team there for the first time. It was great being able to see and catch up with so many previous Patriot patrons and team members again this year -their staying power in the industry shows the strength that they always had… I even saw someone wearing a Patriot jacket – fond memories! There are a lot of people who have a lot more years experience in our industry than I do, and with the downturn in the housing market I’ve always been afraid we aren’t going to have enough new faces and younger viewpoints to keep us moving forward. My fears were unfounded – I met some exceptional individuals that gave me great hope for the future.

As luck would have it I was seated on the plane next to Cory Chappell of Basic Components, Inc. I’ve met him before, but we had a great opportunity to talk about the future of our industry and our companies. What a bright future Basic Components has! It was really refreshing to hear about a company that understood new marketing tactics, social media, and had an idea of what we needed to do to make our homes attractive to today’s buyers. You heard it here – Basic Components is a company to watch and learn from.

Tunica Crowd

The first day of the show was chilly, but it gave us the chance to walk the homes without the crowds that you usually have to deal with. With there being as many homes displayed as last year, this gave me the chance to get my photography done and talk to the sales teams without taking them away from as many buyers. It also enticed buyers to spend more time in the exhibitor booths which worked out well for everyone. If you didn’t visit the Syntec Industries booth to see the latest BeauFlor patterns you really missed out. Did you know that our industry was the first to use this product in the US? Syntec’s president Bill Watters attended the show which showed their commitment to our industry.

I’m excited about the New Champion! Champion Homes of Tennessee had some beautiful homes and showed off some new floor plans that were well thought out and designed. Roberto Kritzer, VP of Design for Champion Homes was at the show and it was great to hear how he came up with the innovations shown in these homes. Sales Manager Mike Barnett of Champion Homes of Tennessee was very optimistic about their traffic and sales at the show, and I have to say whenever I tried to take photos of their homes they were full of potential buyers. That’s a sign of great homes and a great show. The next five photos are of Champion Homes:

Champion Homes

Champion Homes

Champion Homes

Champion Homes

Champion Homes

When I walked the Fleetwood Homes models, I loved meeting Gary Rice Jr., the account sales manager for Fleetwood Homes in Tennessee. Gary is what we need more of – a person who loves our industry and loves working for Fleetwood. His Dad is also in the business and has been for many years, and this insight makes Gary a great representative for Fleetwood.

Sunshine Homes really stepped up this year and their homes were beautiful. I loved their floor plans, and they showed homes that any new homeowner would be proud to live in. River Birch seemed to be a retailer favorite – when I was in their homes people kept coming in singing their praises. Deimo Payne – the general manager was such a great spokesperson for the homes – I could see why their customers and potential customers were so loyal. The next two photos are of Sunshine Homes:

Sunshine Homes

Sunshine Homes

Deer Valley always brings elegant, well built homes to the show, and this year was no exception. Chet Murphree, VP and sales manager was a delight and did a wonderful job explaining to me what makes their homes so unique. The next photo is of a Deer Valley home:

Deer Valley Homes

And that bring us to the Clayton family of home builders. Once again they stole the show. I appreciate the fact that Clayton understands how important this show is, and doesn’t hold back. I also appreciate the fact that when I was walking the show, Kevin Clayton was as well – that to me shows Clayton is supporting the efforts of the Clayton companies that showed here, as Champion did by bringing the people they did as well. The national companies that represented so well here make me believe that Tunica will continue to be an important show in the years to come. The next three photos are of Clayton homes:

Clayton Homes

Clayton Homes

Clayton Homes

I guess we would be considered competitors, but I loved the homes that Derral Dobbs designed for Southern Energy. And what I loved about Derral is how he understood that if our industry thrives, we all will. In the next photo, the gentleman is Derral Dobbs: Designer for Energy Homes:

Derral Dobbs of Energy Homes

The Montana and Hampton homes were crowd favorites – Derral used color and great architectural details to make these homes memorable. The floor plan of the Montana was captivating – it was one of the reasons I decided to attend Tunica. The exterior and floor plan looked so unique from the outside I was curious to see what the floor plan would be in the inside. I loved the spoke effect they achieved with the beamed ceiling and how well the home was laid out. The colors were warm and inviting, but different from the other homes I had toured. The Montana – built by Energy Homes:

The Montana - Built by Energy Homes

The Montana - Built by Energy Homes

The Montana - Built by Energy Homes

The Montana - Built by Energy Homes

The Hampton boasted a refreshing use of color that just made you smile the moment you walked in the front door. It was the perfect beach house inside and out, and the porch was the right width so you could actually fit furniture on it. The next six photos are of The Hampton – built by Energy Homes:

The Hampton: Built by Energy Homes

The Hampton: Built by Energy Homes

The Hampton: Built by Energy Homes

The Hampton: Built by Energy Homes

The Hampton: Built by Energy Homes

The Hampton: Built by Energy Homes

The homes at Tunica this year were thoughtful – in every home you could see attention to detail that might have been missing in years past, and there wasn’t one home that I wouldn’t be proud to show and sell. With the Great Southwest Show just around the corner in Tulsa April 28th to May 1 and the PMHA’s HOMExpo in Pennsylvania right after that, I’m looking forward to this new momentum we have continuing and growing in the months to come.

by Lifestylist® Suzanne Felber – The Home Idea Factory

Suzanne is a member of MH SPIRIT, MHMSM.com’s team of SPeakers Instructors Resources Inspiration Training that can help you clarify YOUR design needs. Visit mhspeakertrainer.org for more information.

Photos by Lisa Stewart – Lisa Stewart Photography ##

2011 Great Southwest Home Show – Grow Your Market Share!

March 4th, 2011 No comments

Oak Creek Homes appreciates the opportunity to showcase our latest home designs and lifestyles to potential home buyers. Oak Creek has participated in this show every year since its inception. In 2010 we saw our market share of homes sold in Oklahoma grow by over 100% and part of that can be attributed to our participation in this annual event. Having the ability to exhibit our new homes in a climate-controlled environment is a real plus.

Thanks go out to the Manufactured Housing Association of Oklahoma Board and Staff for putting on the Great Southwest Home Show and allowing us to be a part of it. # #

Charley Boyer
COO/VP-Manufacturing Division, Oak Creek Homes, LP, Fort Worth, TX 76119;
(817) 478-5551 ext. 306,
cboyer@hstr.com;
www.oakcreekhomes.com

More Companies Commit to the 2011 Great Southwest Home Show!

February 4th, 2011 No comments

Let me take this opportunity to share some more exciting news about the Great Southwest Home Show! We now have another plant confirmed! Southern Energy (SE) of Texas has committed, along with Southern Energy of Alabama. Currently our lineup is: Sunshine, Legacy, Skyline, Palm Harbor, Oak Creek, American Homestar, Fleetwood, Clayton, SE of Alabama, SE of Texas, Franklin Homes and KABCO… a couple more plants are still on the fence! However, only a couple slots are still available in the current site-plan. Naturally we can always add more rows. The Expo holds 100 homes and we do have access to the lower level that will accommodate 50 more homes!

Just three months out and already our supplier/service booths are filling up! Not only will we showcase “industry related” products that only do wholesale business with our manufacturers and retailers/community owners, we also have a large number of booth exhibitors that are showcasing their products during both “Trade” and the two and a half “Public” days. We have wine vendors, specialty food vendors, roasted nut vendors, household decor vendors, healthcare vendors, amusement/lodging vendors, sheds/landscape vendors. There will be no bad locations/areas for home displays at the Great Southwest Home Show! [same] Both the North and South ends of the Expo will be open for public days. At both ends of the entrance, we will have some cool exhibitors (Branson & Southern Journey) showcasing vehicles (trucks/cars) for drawings, plus other vacation giveaways both for Trade & Public Days! The Show will have a “wow” presence unlike any other “industry” show you have ever been too! And again we are only three months out, so it’s continually building momentum!

If you have not yet submitted your paperwork to be part of this exciting show, please do so as soon as possible! You don’t want to be left out! This will be the only largest indoor home show in the country as well as the only one west of the Mississippi!! Go to www.mhao.org and find our show logo on the main page and various links for registrations that fit your needs! # #

Deanna Fields, Executive Director of the Manufactured Housing Association of Oklahoma (MHAO) and the Show Coordinator

The Chairman’s View – Great Southwest Home Show in Tulsa

May 28th, 2010 No comments

Quick Trip Center with the "Golden  Driller" the largest free standing statue in the world.
Quick Trip Center with the "Golden Driller"
the largest free standing statue in the world.

The Great Southwest Home Show concluded its second year and had the added feature of a Public Days segment to bolster its viability. Due to time restrictions on the availability of the facility, Public Days were held on Friday evening and all day Saturday after the conclusion of Retailer Days on Friday afternoon. Over 1500 people attended Public Days and the retailers showing homes expressed high levels of satisfaction with both the public’s reception to the display and the actual sales results that occurred during the public display period.


The Great Southwest Home Show had two other events associated with it. One event was the state convention for the Manufactured Housing Association of Oklahoma (MHAO). MHAO conducted the convention in tandem with the show in an effort to assist manufacturing participants in streamlining expenses. Instead of a trip to Oklahoma for a show in the Spring and a return trip for a convention in August, a single trip sufficed. The convention attendance was much higher than had been experienced for about a decade and plans are to keep the events linked in the future.

Manufacturers enjoy the benefits of an indoor facility.
Manufacturers enjoy the benefits of an indoor facility.

The second event held in association with the Great Southwest Home Show was the face-to-face meeting held at least annually by the Manufactured Housing Consensus Committee (MHCC) along with assigned staff members from HUD’s offices in Washington, DC. I had originally proposed this associated meeting over a year ago when the first Great Southwest Home Show was held. Bill Matchneer from HUD did attend that show and was sufficiently impressed to bring about the associated meeting for the second year of the show. The meeting participants were allowed special access to the display homes on Wednesday afternoon prior to the official opening of the show on Thursday. Both HUD officials and committee members were greatly impressed by the quality and affordability of the thirty plus homes on display at Tulsa’s Quick Trip Center. Some of the meeting participants had never been in a manufactured home prior to those they toured at the Great Southwest Home Show. Hopefully HUD will see the benefit of at least periodically holding the Manufactured Housing Consensus Committee in association with the Great Southwest Home Show.

Supplier booths are conveniently set up in the middle of the  display homes.
Supplier booths are conveniently set up in the middle of the display homes.

While Bill Matchneer had been the driving force behind getting the MHCC to Tulsa for the show, his replacement Teresa Payne did not skip a beat as she led the HUD delegation and the MHCC to the event. HUD staff and the MHCC members attended the MHAO convention dinner on Wednesday evening and Teresa Payne wowed the crowd with her opening line (“Manufactured Housing rocks!”) as the keynote speaker at the convention dinner. The dinner marked the first time in its almost 10 year history that the MHCC committee had actually attended an industry event and got a chance to converse with a broad spectrum of industry members.

Teresa Payne highlighting the HUD Code label

Teresa Payne highlighting the HUD Code label

The Quick Trip Center in Tulsa is an ideal facility for hosting such an event as the Great Southwest Home Show. The Quick Trip Center is largest open span structure in the United States with 10.5 acres that is indoors and air conditioned. With in-floor electricity to each display location, generators are not needed. Manufacturers can set up, conduct the show days, and tear down and not have to worry about whether or not rain storms are headed their way. While dealer traffic was lower than expected on Friday overall manufacturer’s response was positive with several reporting that they planned to increase the size of their display next year.

'Dualing remotes' being set up by two radio stations for public  days.

‘Dualing remotes’ being set up by two radio stations for public days.

Educational seminars were also included in the show agenda at no charge for the attendees. Speakers were John Delves and Kurt Kelly. John Delves taught three sessions that focused on selling skills and performing well in a down economy. Kurt Kelly addressed 24/7 communication with clients. All seminars were well attended and both speakers received great reviews. The seminars are conducted on the day before the show opens in the same format that I enjoyed some thirty years ago when I would go to the Louisville Show. We plan to continue to offer the educational seminars which also serve as Continuing Education credits.

Aisle shot at the QT Center

Aisle shot at the QT Center

Retailers that stayed over to work on Public Days paid extra for that opportunity in order to cover the promotional expenses for the time period. As mentioned previously, the retailer response was overwhelmingly positive. The Great Southwest Home Show has a unique ability to conduct the Public Days since unlike other shows in the nation, the Great Southwest Home Show is conducted in a secure indoor facility and in is located in a large city from which to draw the attendance. We look forward to growing the show and conducting it for many years in the future. Special recognition and thanks need to be given to both Deanna Fields, the Executive Director of MHAO and Dennis Hill from Show Ways Unlimited. Both worked tirelessly on the event and were crucial to its success.

Doug Gorman
Show Chairman
The Great Southwest Home Show

For more information and photos, see Suzanne Felber’s report and Tony Kovach’s photo report.