Newlyweds

[er1c]

We recently got married and are currently renting. We really have no savings as of yet. We have been casually house hunting and stumbled upon some wonderful manufactured homes.

Here is our current issue; Should we wait a few more years and purchase a traditional old house or buy a manufactured house that is NEW, spacious, comes with appliances, little yard care, etc etc. Our main concern is 5-10 years out. With a "real" house, we can be pretty certain that the value will be near the same or increase. With a manufactured home, from what I can tell, the value always drops. I certainly don't want to be a position of 5 years down the road and be upside down in a house when I should be even or making a profit...

Any advise is greatly appreciated!

[David Oxhandler]

"Many Americans have been victimized by an outdated conception of manufactured homes—one which has been perpetuated in the news media... IN FACT, manufactured homes held up well, even when compared to site-built homes. That this was be the case should not really surprise anyone: since 1999, manufactured homes have been built and installed to standards tougher than any but the most recent codes for site-built structures." http://www.builtstronger.com


For a point of view from the Lakeland Florida area, where there are more manufactured homes per sq mile than any place else on earth, take a look at this article from LEN BONIFIELD. He tells us "As with all real estate, location and maintenance of the home play a huge role in determining the rate and extent of appreciation. In a community setting, location equates to amenities, location in the state, proximity to rivers, lakes coastlines, etc. In most average communities, homes that are 25 to 30 years old can be found selling for $15,000 to $30,000, when they sold new for under $10,000. It's not much, but it is some, appreciation. A recent newspaper article related a manufactured home for sale for more than $250,000 in Broward County. It is common to see 30-plus-year old homes sell for more than $100,000 in the Fort Myers area." He tells us "If you go to Natalie Estates in Stuart and hundreds of other good communities in Florida, you will find 1970's parks where housing has appreciated greatly. California is another classic example of selling prices several times more than they sold for originally." Read the entire article - Factory-Built Homes Appreciate




Consumers Union also has reported on this question
http://www.consumersunion.org Read it and learn that "average appreciation rates of manufactured homes packaged with owned land are statistically in line with the site built market, and there are few inherent reasons that a home built in a factory should perform differently than one built on site"




"For many years, people have assumed that the value of manufactured homes depreciates. This is not so. Studies conducted at two Universities revealed that the determining factor of appreciation in both types of homes was their location. Maintenance also plays a major role.

If a home of any kind is built or setup in a bad neighborhood or area it will probably depreciate no matter what. In a good area or neighborhood they will generally appreciate in value depending on the local housing market and economy. In the case of a manufactured home, if it is setup on a permanent foundation with a concrete pad, blocked properly and anchored properly, with good drainage so water does not sit under the home and if one buys from a reputable dealer who uses good setup people, the home will be no different than a site built home. It would appreciate in value at the same rate as a site built home in the same area.

The cost of manufactured homes is significantly lower than the cost of site-built homes. This gives them an instant appreciation between what the home actually cost the homebuyer and what its market value is. In some cases, a multi-section manufactured home has sold for more the second time than the first. Properly setup and well taken care of, you are talking about a fantastic investment potential." http://www.rebelhome.net



Here are a few more opinions - lifted from the MHI web site:



Manufactured Housing Research Project
University of Michigan, 1993
Dr. Kate Warner and Dr. Robert Johnson

This study is divided into six sections dealing with various questions surrounding manufactured housing: Quality, Costs and Finance, Values, Impacts on Adjacent Property Values, Manufactured Housing and the Senior Population, and Alternative Ownership and Innovative uses. Findings included:

- Manufactured housing quality has become essentially equivalent to that of conventional housing
- Manufactured housing compares favorably with site-built housing as an affordable housing option
- Manufactured housing, like site-built housing, can be viewed as an investment with probabilities of appreciation and equity accumulation
- Manufactured housing has no impact on the appreciation rates of surrounding properties, putting to lie the myths of negative property value impacts.

The Future of Manufactured Housing
Harvard University Joint Center for Housing Studies, 1997
Kimberley Vermeer and Josephine Louis


The Harvard Joint Center report is essentially a survey of previous academic studies of manufactured housing. It draws from earlier Joint Center studies, particularly Residential Property Value and Mobile/Manufactured Homes: A Case Study of Belmont, New Hampshire," which is Thomas Nutt-Powell’s 1986 examination of property value impacts of manufactured housing, as well as the Manufactured Housing Research Project abstracted above. The Future of Manufactured Housing points out some areas that the industry needs to address (many of them dealt with in the Manufactured Housing Improvement Act, such as installation) and the conclusions that it draws are generally very favorable for the industry.

The Impact of Manufactured Housing on Adjacent Site-Built
Residential Properties in North Carolina
East Carolina University, 1997
Dr. Richard Stephenson and Dr. Guoqiang Shen.

The first examination of property value impacts of manufactured housing that draws on real-world spatial relationships via GIS data, The Impact of Manufactured Housing on Adjacent Site-Built Residential Properties in North Carolina dispels the twin myths that manufactured housing automatically depreciates and drags down surrounding property values. The most telling findings were:

- Manufactured homes with a fixed foundation or listed as real property appreciated at comparable rates to site-built residential properties
- There is no clear negative correlation between the overall appreciation rate of site-built residential properties and the presence of manufactured housing in close proximity

Manufactured Home Life, Existing Housing Stock Through 1997
Iowa State University, May 1998
Dr. Carol B. Meeks

An update to an earlier study conducted when Dr. Meeks was with the University of Georgia, this study takes a more comprehensive look at the manufactured housing stock to determine the life expectancy of manufactured homes. Manufactured Home Life, Existing Housing Stock Through 1997 finds that the life expectancy of manufactured homes is comparable to the life expectancy of new site-built homes.

Code Comparison Study - MHCSS vs. CABO One- and Two-Family
Dwelling and Model Energy Codes
University of Illinois at Urbana-Champaign School of Architecture, January 1998
Jeffrey Gordon and William B. Rose

Compares the applicable requirements of standards for construction of a home built to the federal Manufactured Home Construction and Safety Standards (HUD Code) with the CABO One- and Two-Family Dwelling Code and Model Energy Code. The comparison concludes that while in some areas the HUD Code requirements are more restrictive, and in other areas the CABO code are, on balance the two codes are comparable, resulting in houses that perform similarly.

Identification and Measurement of Zoning Barriers Related to Manufactured Housing:
A Location and Accessibility Analysis East Carolina University, 1999
Dr. Richard Stephenson and Dr. Guoqiang Shen

The 1999 ECU Study examines what impact zoning has on manufactured housing placement and it’s proximity to "positive" versus "negative" public facilities. For the purposes of the study, "positive" facilities included environmental, health and emergency rescue services; cultural, recreational and education services; and auto, food, shopping and other business services. "Negative" facilities include landfill and solid waste sites and other similar uses. Findings include:

- Manufactured housing is located farther from "positive" community facilities, which is especially significant in the area of life safety services
- Manufactured housing is located closer to "negative" public facilities such as landfills and solid waste facilities
- Zoning districts where manufactured housing is a permitted use have a higher percentage likelihood of being located in flood zones
The general conclusion is that many of the negative perceptions of manufactured housing are in fact self-fulfilling prophecies perpetuated in part by the limited placement opportunities created through local government zoning actions.

The Impact of Manufactured Housing on Adjacent Site Built
Residential Properties in Two Alabama Counties
Auburn University - Montgomery, 2000
Charles E Hegji and Linda Mitchell

This study used property valuations from Montgomery and Lee Counties in Alabama to assess the impact of proximity to manufactured housing on site-built property value. Using a methodology similar to that use by East Carolina University in their earlier study, including a spatial analysis using GIS, the Auburn University - Montgomery study concluded that:

- The appreciation rates of individual manufactured homes in both counties were comparable to those of site-built properties
- Proximity to manufactured housing did not appear to be a significant determinant of property values of site-built residential housing http://www.manufacturedhousing.org/




"The appreciation in value of manufactured homes comes back to the old real estate axiom -- location, location, location. When properly sited and maintained, manufactured homes will appreciate at the same rate as other homes in surrounding neighborhoods" http://www.mhao.org

[rmurray]

I ditto every word of the above post, be sure to follow some of the links and calm your mind..I would like to comment on the other side of the coin. You said "With a "real" house, we can be pretty certain that the value will be near the same or increase.".. Well NOT always true, in the last 3 years "stick built" homes have average losses of 40% nationally with FL,CA and Nevada being hit the most. There have been some areas where homes have held fairly steady but few if any have gone up in price. Buying a house is a LONG term investment. No matter what kind of house it will take years to build equity enough to pay the costs of selling it..Of course right now you are paying what amounts to 100% depreciation and all you pay is gone forever. Educate yourself on your location, the product and most of all mortgage finance. A good place to learn about mortgages is here:

http://www.mtgprofessor.com/

Then try the bookstore here and invest in the buyers guides listed there. Spend some time reading and searching the thousands of posts in these forums and see what thousands of folks just like you have asked and gotten answered. Stop back here often and ask questions..Good Luck Go For It!!!!!

[trmimo]

You may want to think about a used manufactured home. If you want to sell in 5 to 10 years, your best bet is to buy a home that you can finance on a 10 or 12 year note. That way you really build equity. Real equity comes from paying off your house, not inflation. You see, the problem with rising home values to create equity is that if your house goes up 20% in value, any house you will want to buy will also have gone up 20%. You don't really realize any profit until you exit the market, whether by moving to a less expensive market or deciding to rent again. Many parts of the country, have as Rmurray said, seen values drop significantly for all types of homes. Today you can buy a nice, used home for a fraction of what it cost new and let the previous owner take the hit. You may not get your dream home that way, but if you want to move again in 5 or 10 years it doesn't sound like you are expecting to get your dream home right away. And that's good. That is what got so many folks in over their heads in the last few years.

[er1c]

I guess what scares me the most is my father had one in in Florida (just west of Jupiter). It was a very nice community and bought it used for $70k, put in about $12k of upgrades and sold it for $68k. I also see pre-owned units here in Ohio going for $30,000-$40,000 LESS after just a few years.

Maybe it just depends on location, how good of care you give to the unit and the timing of the economy...

Thanks all for your input!

[David Oxhandler]

If you want to get a good handle on buying a manufactured home,
how to determine the fair price of a homejust how the manufactured home industry operateshow to find a dealer worthy of your trusthow to make the right home selectionsmart negotiating tactics, (what not to disclose) Deal terms—what to insist be in writing them
DOWNLOAD The Grissim Guide to Manufactured Homes and Land It will be the best $$19.95 you can invest and very reasonable tuition to attain the best education available for manufactured home shoppers ... be informed so you can make the right decisions

[letsbuildit]

Hello

have you considered buying used and putting on a lot with a hud foundation

I have seen some pricing for double wides for 10,000 - 25,000 used and the foundation runs about 7,000.00 if you qualify you would have to verify with a hud representqative. of course these are just estimates you would have to find the exact pricing.

[John Grissim]

I'm the author of the Grissim Guides, and a sincere believer in manufactured homes (I live in one, for starters, and love it). But, not all manufactured homes are equal.
Here is a core opinion I hold about manufactured housing: while a manufactured home can be an excellent high-quality dwelling comparable to a site-built residence (and at a lower price), at least 60% of all manufactured homes built are cheaply constructed, unattractive, show significant deterioration after five years, and if not legally tied to the land as improved real estate, will not appreciate in value and will be very difficult to sell because banks are loathe to write loans on “used mobile homes.”

Having said this, I would add that I am no elitist. I will never disparage low-end HUD homes per se, because they answer a huge need. One of the great things about manufactured housing is that it can provide basic shelter for those who otherwise would have no home at all. If properly sited and well-cared for, even the humblest single-section home can be fine affordable housing.

As for where I get the 60% number, it derives from an unscientific calculation involving an estimate of the number of homes built annually with a Ratings Guide construction rating of less than 5, together with nearly ten years of looking at manufactured homes both in the field and on the Web, and regularly talking to industry insiders whose perspective I hold in high regard. Who knows, the percentage may be closer to 65.

Thus, the following recommendation: if at all possible, restrict your home search to the remaining 40% of manufactured homes that are well-built and feature-rich. Shoot for a Grissim construction rating of at least 7, adding options as necessary to upgrade to that rating the home you are considering.
Hope that helps.
John Grissim

[BradMHBI]

As we have seen in recent years, "real" houses do NOT always go up in value. The main reason they have dropped so much recently is because so many people jumped the gun and got in over their heads, buying way more home than they could afford. Even with the lower prices now, it’s still too expensive for most people just starting out. But does that mean you should keep throwing away money each month by renting? No!!

With the "real" housing market coming unglued, mobile home values have held up very well as people downgrade to something they can afford, so you should get some value appreciation. And with a 10- or 15-year mortgage, you will pay down a good chunk of it in 5 years, leaving you with plenty of equity just from that (you certainly won’t be upside down). It’s like having a built-in savings account, and that equity will allow you to move to a "real" home in 5-10 years when you can comfortably afford it.

I recently discovered this for myself and I bought a used mobile home in a great location. I’ve enjoyed the whole process so much I’m even writing a blog to share what I’ve learned and what I continue to experience. I would love to hear your own experience here or on my blog!