depreciation on manufactured homes

[Daniel Cronk]

Hello. My wife and I are in the process of buying a manufactured home. We live in Michigan. We are interested to know the facts re depreciation on manunfactured homes - I seem to find a variety of opinions. Would anyone have a definitive answer? Thank you. dc

[rmurray]

Manufactured Homes resales are just like any home resales and the local market..Location is the key...Right now home only resale in most parks is very tough...There are thousands of used homes on the market owned by lenders who are willing to take large losses...The homeowner has to sell in this competitive market...This will turn around in time..but it might be a few years..

Homes with real estate...react to the local market...just like any home...If the market is good and the location is desireable the appreciation is the same as any home on the market...If the local market is in depression or the location is not desireable..It will still react like any home..

Remember in stick builts...it is not the home that appreciates...It is the land and the location..

[Jon]

Daniel:
First, I agree with Murray.
Second, this is not an easy and easy subject to discuss due to the many elements involved.
Third, there are far too many persistent and inaccurate myths and fantacies about manufactured homes.The old (and incorrect) perception that manufactured homes will automatically depreciate like a car are simply not valid. In my area, for instance, twenty and thirty year old manufactured homes that originally sold for $8,000 to $12,000 are typically reselling in a range of $19,000 to $30,000. Some sell for more, much more in a few cases. Naturally, each and every manufactured home in this area is not worth more and appreciation in value is not automatic either. In fact, we receive reports from other areas indicating resale values are typically depressed. Clearly, there are many factors that influence market value in a postive or negative manner.
Two of the biggest influences are the location of the home and the overall health of the local housing market in your area. Both of these have a definite though often varying degree of affect on manufactured home market value, even if the manufactured home is in a manufactured home community. Keep in mind, however, that location means more than the township or county in which the home rests. Location involves the site on which the home is situated, its landscaping, desirable views, convenience to recreation/services/shopping/employment, general condition of the homes in the immediate neighborhood, property taxes, etc.
Your local housing market is another heavy contributor to value. Usually, though not always, a strong or high demand for all types of housing will drive home values higher (including those for manufactured homes, though frequently at a different rate). As may be expected, a weak market could have the opposite effect.
Some other notable factors that have an active influence on value relate to the home itself or other homeownership matters: Size, age, condition, number of rooms, number of bathrooms, value-adding options and features, accessories. Of course, this is not a complete list of influencing factors but you should get the idea of the complexity to reasonably estimate value.
You asked about receiving a definite answer to your question of depreciation for your locale. As you can see, a conclusive or definitive reply is virtually impossible. Influencing factors to value are in constant flux, so what may be an indication to value today may change next year. Still, if you are concerned about market value and/or equity before you purchase, have a qualified manufactured home appraiser prepare a value report for you (a report can be generated based on a home you intend to purchase and its intended location). Just make certain the appraiser is experienced and qualified to evaluate manufactured homes. Our experience has shown some stick-built appraisers (and one or two real estate agents) sometimes share the same or similar inaccurate biases as do a few others who actually know little, if anything, about the product. Such biases may unintentionally interfere with an objective review and evaluation. But a fair report should provide a reasonable estimate of market value and help you decide.
Jon

[D. Goshorn]

Dan, I agree totally with the above comments, except you need to look for the pitfalls in the financing. I have done this for a living for the last 7 years and work for a retailer/developer. If you have any further questions please feel free to call me at (248)354-9005 x227.

Thanks
Dustin

[Daniel Cronk]

Many thanks for these wonderful responses! Thanks for dispelling the myths and legends re manufactured housing. I can tell you that we have an outstanding piece of property (3.25 acres) in a fantastic location. We are surrounded by large parcels with significant homes on all of them. Location, location, location. We just made the final selection of interior items for the home - we hope to be moving in by April. Thanks again for your help! Regards, dc