First Time Homebuyer Considering MH - please help

[drb1999]

I have lived in an apartment for 16 yrs and have been researching buying my own place. I don't think I can afford a "stick and brick" house, unless I could find one for $40,000, which is probably not going to happen.

I have been approved for a $96,000 mortgage (MH or stick & brick) and plan to look at MH's (I would not use the whole amount; I need to have a total monthly payment including land or lot in the are of $600). I am completely lost as to what brand to choose, should I go for a pre-owned MH or a new one, where would I put it, etc.

I think my only hope of getting out of apartment living is to buy a MH. Everyone I've talked to about it is very negative about MH's, stating they depreciate and I'll regret it because they fall apart, etc.

I live in Houston, TX and there are many MH parks in the suburban areas here, but lot rent is at least $265 to $300, and I am wondering if it would be better to buy a very small plat of land rather than lease a lot in a park?

I would appreciate any and all advice, comments, and direction. I've got a month or two before I have to get out of my apartment because there are new owners and they are refurbishing all the units, so I will have to get out.

The idea of owning my own home is very appealing to me, but I don't want to regret my decision.

I know I won't be able to call maintenance when something breaks, but I am thinking that if I bought a new home, everything would be new and less likely to break.

Thanks for any and all comments.

[David Oxhandler]

Im afraid that you have been misinformed about home appreciation/depreciation - But dont feel like your alone. "Many Americans have been victimized by an outdated conception of manufactured homes—one which has been perpetuated in the news media... IN FACT the mass media is singing a new tune about manufactured housing today

See the following recent articles:

Mobile homes are a low-cost retirement option from FORBES.com

10 Tips: Do homework before buying manufactured home From TAMPA.COM

Seniors Buying Upscale Park Trailers to Spend Retirement in Vacation Spots from Senior Journal

Gateway to our articles and features about Buying a manufactured home


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."


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 the late LEN BONIFIELD. He wrote "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 point of view..."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."

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

Manufactured Housing Research ProjectUniversity of Michigan, 1993Dr. Kate Warner and Dr. Robert JohnsonThis 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 HousingHarvard University Joint Center for Housing Studies, 1997Kimberley 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-BuiltResidential Properties in North CarolinaEast Carolina University, 1997Dr. 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 1997Iowa State University, May 1998Dr. 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 CodesUniversity of Illinois at Urbana-Champaign School of Architecture, January 1998Jeffrey 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, 1999Dr. 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 BuiltResidential Properties in Two Alabama CountiesAuburn University - Montgomery, 2000Charles E Hegji and Linda MitchellThis 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
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"

[marinermark]

I bought a new manufactured home with the lot in Ft. Myers, FL in 2005. I'm very happy with it. If you look at used homes, Look only at those built after 1995. Hurricane Andrew, which hit Miami, FL in 1992, destroyed many mobile homes, and resulted in stronger construction standards for homes built after 1994. I recommend owning the land. You'll save money in the long run, compared with paying lot rent, and you have a more stable investment that you control and is more likely to appreciate. Many rental parks in Florida have sold out to developers, leaving the homeowners with an investment in the home, that must be moved or lost. Plan on Association fees in the park. Your mortgage approval amount should put you in range of many desireable homes. Good Luck.

[David Oxhandler]

Everything that marinermark is saying about pre-owned homes is true... except that the post Andrew construction is only an issue in hurricane prone areas. I am in Central Florida, about half way between the Atlantic and Gulf. We went through Andrew and the back to back storms for 2 years and didn't even loose a window. Historically storms have lost a good deal of their punch by the time they move very far inland and are not a nearly as destructive as in the coastal regions.

There are a considerable number of pre-Andrew homes that went through several storms and are excellent buys today. I live in an 80's vintage Fleetwood that is in excellent condition and continues to appreciate in price.

I buy and sell used homes and have recently purchased a pre-code (1970's) 12 wide with several additions that were built correctly. The folks that owned the home loved it and went out of their way to take care of regular maintenance and put a metal pan roof system on the home when it was new. The home was in such great shape that I was able to sell it for more than a 1996 doublewide that the previous owners had ignored and abused.

The decision on used homes goes back to the decision on any real-estate purchase. The value is based in location location and condition.... dont be afraid to consider all possibilities that meet your budget. I feel it is better to own home that has a few more years on it that is affordable, than one that might break the budget.

[mannymanbo]

Regardless of the nice, public relation pieces the industry publishes, manufactured homes are vehicles, just like your car.
Does you car depreciate?

[David Oxhandler]

manny -

that is simply old thinking that has no base in today's real world... the value of manufactured home and land package will follow the ups and downs of the local market.

Consumer Reports is not biased to our industry and that was their findings.

Newer manufactured homes are expected to last 50 years. That, of course, depends on how they are taken care of. Maintenance is so important it is priceless.

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/deprec.html

[marinermark]

Manny:
I'm a first-time manufactured homeowner now in Ft. Myers, FL. My (2005) double-wide house (which I bought new) is, at 1500 sq. ft., just a little smaller than the CBS house I sold in Miami. It's more nicely appointed and just about as permanent. After you join and finish the sections, pour and build the carport,walkway,entryways, lanai and shed, it's not going anywhere (I hope-unless another Hurricane Andrew or Charley hit it at ground zero). My wife had an 11 year-old 12 wide in a rental park in Miami. When we got together she sold it at a small profit. I also have a 25ft RV travel trailer - to which the depreciation factors do apply. Values of MHs are down from what I paid, as I bought approaching the top of the real estate market in mid-2005. Once the current inventory of MHs and condos clears, I expect values to return and increase per normal appreciation