housing slowdown

[richard]

With the current slowdown in the sales & building of new homes it seems the demand for material would also decrease. Do you think the cost of material and in turn the cost to build will bring the price of a new manufactured home down any in the future?

[David Oxhandler]

You would think that it would stand to reason that the price of components would go down as the demand for homes dropped. At some point this could happen but as the demand for homes has slowed so has the production of everything from lumber to wire. Many companies are using up inventory that they have in stock and laying off their workers 'till the demand for their products increases.

While demand is down so is supply and every day that passes the existing inventories get smaller. So prices of homes and components reach a bottom point where they stop going lower... typically they will hover for a while and as demand gets greater than the supply prices start to jump up.

The big question is have we reached that bottom point?

Well if we have not we are surly getting close. If your considering purchasing a home NOW IS THE TIME. Prices are lower than they have been for many years and interest rates lower then any point in modern history. We are in a BUYERS MARKET. Many of the sellers out there are very hungry and offering huge concessions. Don't be afraid to ask for a better price. Qualified buyers are writing their own tickets in many parts of the country.

You surly can wait but if the prices and interest rates your finding now are affordable don't miss the boat...,. Your talking about the place your going to live for years to come. Don't treat this purchase like a casino game, or speculative investment. Go for the sure thing because you just never know when things will turn. Find one that suites your needs and that you can afford and GET YOUR HOME NOW!! . You will be glad you did.

[tonytulloh]

we offer scotbilt homes both modular and manufactured. over the past few years we have seen a steady increase in material cost from numerous suppliers . lumber,flooring products, steel, air conditioning, roofing material, copper,aluminimum, the list goes on and on. cost of building a quality home will continue to increase. the benefit home buyers have today is the multiple lines available to compare and negotiate. our sales over the last year have increased double to year prior and contribute our success to affordable quality and service scotbilt offers. take advantage of low rates and shop all brands . you will pay for what you get, if it sounds too good be cautious.
tony tulloh scotbilt custom home center plant city,fla www.scotbilt.net

[mhpsrus]

Richard,

Business have two kinds of costs - variable and fixed.

In many cases, the cost of materials (OSB, 2x4's, sheet rock, plumbing, carpets, wiring, vinyl, contract labor, etc.) is VARIABLE in that they are brought in just as they are needed to construct a home (you've probably heard of the phrase "just in time inventory" that many businesses have adopted to minimize the cost of carrying large inventories).

There are also many costs that are FIXED; salaries, real estate taxes, heating, cooling, all costs of occupying and running a factory, sales and management operation.

In the current business environment, the home manufacturers are selling fewer and fewer homes. This means that the fixed costs of the business have to be spread over fewer and fewer homes. So even if the variable costs are going down (and if you go to your local lumber store you can see that they are), the amount of fixed costs for each home are going up. How that translates into the cost of the home depends on the variable cost/fixed cost makeup of each home. Hence, the total cost of the homes you see on the sales lots may not be falling.

Regards, Bill