| Resurrection, or Demise of Manufactured Housing – it's up to us |
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by Jerry Bennett
We must reinvent the image of the manufactured housing lifestyle: The industry is still hounded with phrases like “trailer park” and “trailer trash.” The news media loves to promote manufactured housing as unsafe and susceptible to fire and extreme weather conditions. When a news event takes place in a community the news media seems to love to broadcast that it took place in a “trailer park” rather than a “manufactured housing community.” These myths persist because we have done nothing to change the public perception. The industry must work together to change the image of the manufactured housing lifestyle by creating regional and local marketing campaigns to rid the industry of the old “mobile home” stigmas and make the lifestyle more attractive to a wider range of home buyers. We can identify and exploit our true competitor (convention housing) by identifying profitable niches in the market. For example, many site built homes being purchased today are REOs that may in some markets be purchased with a lower monthly housing outlay than that of a new manufactured home. We cannot make the mistake of assuming that every one who lost a conventional home to foreclosures is not able to afford a manufactured home. Many of these individuals DO still have resources and, with the right marketing, could be converted to manufactured housing. We simply have to market to that audience. Some industry advocacy bodies such as the California Multiple Listing (http://www.calmultiple.com) in Tustin, California, with the supported by dealers, park owners and manufacturers are capable of creating regional advertising programs that recreate and reenergize the lifestyle. Collectively we can recreate the image of the manufactured housing lifestyle as a practical and desirable alternative to any type of housing. We (the industry) must provide wholesale and retail lending: Financing is the life blood of any industry. Lean cash flow has forced major lenders to pull wholesale credit needed by dealers to purchase inventory, resulting in less models to show and less home sales. There are fewer retail lenders as well, and they are requiring tighter lending standards due what some may view as unconscionable rent increases. This is contributing to borrower foreclosures on homes with little value, compounded by the lender's obligation to pay space rent on repossessions with no effort on the part of the park owner to assist in maintaining the site or in the sales effort. Some park owners who can afford to are being forced to set up their own loan programs just to preserve their rent base. There are programs available that teach park owners how to set these programs up. We must get pricing under control: The industry is losing customers to the depressed conventional housing market. We are being out gunned by competitive pricing between manufactured housing and condos and site built homes. (see The MHeT Forum, January 27, 2010). Using a scenario based upon current conventional housing trends and using a park space rent of $1,300 per month (CA) the monthly payment of a new manufactured home would be above that of a conventional home by nearly $600 per month and the payment for a resale manufactured home would be above the payment for a conventional home by about $100 per month. Park owners must bring space rents inline with market values and consider a “no rent till sold” policy for dealer in-park models and lender repossessions. Almost everyone remembers the surge of patriotism in Americans after 911. 911 was a rude awaking for a nation blind sided and ill prepared to handle the pain rendered to the American heart. Today the manufactured housing industry is suffering from a similar pain, aside from the economic downturn; we are suffering from our own “complacency.” If we don't reinvent the lifestyle, establish our own financing and get control of prices they will destroy the entire industry now, and in the future. Collectively, we must look inward and find that same patriotic spirit to actively pursue this enemy and save this industry.##
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The manufactured housing industry has been blind sided by the fear created by the economic meltdown. In the past manufactured housing had its' place in the housing market and the boundary lines between manufactured and
site built were pretty clear. However that's all changed as the economic ground shifts under our feet. Granted, foreclosures, unemployment, fewer lenders and tighter credit all negatively impacted our consumer base but those things are not totally to blame. We, as an industry, have long ignored our market image, let prices get out of control and forced lenders out of the industry. These three major elements must change before the industry can turn toward profitability.
Jerry Bennett is the CEO and President of the California Multiple Listing (“CML”) (
