I'll sit this one out.

[kevin o']

Speaking firsthand after 2-3 wks. of research, viewing new & older MH's, talking at length with brokers, dealers, salespeople and consultants I believe the Orange County, S.California market is way overpriced and not one where I would want to risk an investment in at this time.

I plan to sit it out for two yrs., at which time I'll be 55 and elgible for a space in a senior park - which the majority of parks around O.C. are. My rent will be considerably lower than family parks. My home will appreciate better in value and I'll have that much more time to wait for the home prices themselves to steady a bit. And MOST IMPORTANTLY in Orange County, the absurd prices one must pay the dealer/park owner to get a space will hopefully have dropped.

Presently, the going rate for a space in a O.C. all-ages park is between $25-40K.
Conversations and research show that 2 -3 yrs ago these spaces were being sold for $2-3,000. For a first time buyer the rush of owning a beautiful $75,000. home is more than tempered by the fact that to place it in a decent park you must up that total price to over $100,000. to buy some old Fleetwood and get your space.
I can't justify being held up like that by the dealers/park owners while the space crunch is on. There are no spaces in most good parks. The dealers/park owners are holding all the cards now.

My feeling is that more than a few spaces are going to be open and be selling for pre-2000 prices ($2-3K) once the downturn in the economy we're seeing in Northern Calif. makes its way to S.Calif. The lack of home value appreciation in many of the parks I have visited (save a very few) and the rents which are now between $750 and $925. in most parks will have to affect this market. There are many 'for sale' signs in all-ages parks around here. If I owned an older home and saw my rent going past $800/month I would be feeling a bit nervous now.

Pricing some of the these 1980's and early '90's homes that we see for sale shows there's a lot of wishful thinking going on with owners and agents. They seem wildly overpriced - 1980's Golden Wests for $75K and so on. Where are these prices going to go when reality returns and spaces open up? A turn in the economy and this balloon will burst.

My wife and I began this research into MH's after conversations with friends, who knew other friends,living the 'good life' in a MH park around here. The 'low cost' of such a life may have been the norm when they last talked to their friends a few years ago (about actual dollars & cents), but the playing field has changed considerably - especially for first time buyers in a space-poor market like Orange County.

I'll sit it out for a while and continue to hone my skills and contacts. Save for a nice home in a senior park (rents $370-550 now) ,or better, buy a piece of land for that nice Hallmark we dream of.

[Sandy]

Hi Kevin,
It's me again, Sandy from Torrance. Do you mean to tell me that in O.C. the parks are charging money just to get a space to rent??? I didnt even know that they could do that. Our park is an all age park but only for the last 2 1/2 years. It used to be a senior park and we still have a lot of older homes in there. Slowly the newer houses are coming in. We just happen to be in the right place at the right time. When we met with our dealer at this park he showed us a brand new home that was already placed there. He tried talking us into that one if the person who bought it ended up pulling out. We told him we want to pick our own home, the floorplan and color scheme etc. So he showed us an old laundry facility that he said they were going to tear down to create two spaces. One larger than the other. That is how we got our space and we did not have to pay for it. Our rent started the first day that we moved in, the space rent is $650 a month. Our house is one of the biggest with one of the largest lots.We actually have a back and side yard. Our home cost $93,500 with some upgrades. We are living the "good life". Our mortgage and space rent is the same as some of my friends are paying for rent for their apts.in this area. I'm sorry to hear that things are so different price wise only 40 miles away!

[Karl]

Man, those prices are hard to fathom! Here in Central Illinois, spaces rent for $200 a month, tops, and nice doublewides sell in the $50,000-$60,000 range. Guess it's the old rule of supply and demand.

[kevin o']

Hi Sandy,

A Hallmark Southwest dealer I spoke with a few days ago said this about Orange County and parks in general (when I asked him what parks he could put us in):

"We don't work with any parks. Most of our sales are to people who own their land. We know what's going on and, we'll not get involved with that."

It's absurd but, somehow legal I guess. The first dealer I spoke with said he could put us in the park we wanted (a nice one) but it would cost $30K, on top of the $76k for the home. Rent would be $750/month. When I asked about the "buying the old home on the lot" routine he said that this is how you get a space in the good parks. He (dealer) buys old house, sells in Mexico "for no more than $15K" and then turns around and adds the $30K to MY price. ???

Dealers/park math: customer pays dealer(and/or park) for old home: $30K
sale of same in Mexico: 15K
minus: the cost of removing old home -4-5K
(probably paid by Mexican buyer)

Net gain to dealer/park: approx. $40K


I've run this buy more than a few buyers, sellers, agents and dealers and this IS how the game is currently being played here.

I wont go on and beat this subject to death. Obviously you need more money than we had expected. The online consultants and books we read have all been quite lacking on this subject. Perhaps because of the very overheated market in S.California and, also because we are probably seeing the end of a cycle, this may all balance out in another year. It could be worse. I've no Enron stock and we're not stuck trying to get out of one of these high-rent parks.

[Sandy]

Hi Karl,
Believe me when I started seeing the prices that people pay for even bigger homes than mine in other areas of the US-it drives me nuts that I had to pay 20-30K more for the same thing. But it just seems like things cost more here period. Regular site built homes are $250K for 2bd, 1 bath 50 year old homes. That's why we went with a MH at least it's what I want, new and I can afford it. Plus we live in a good school area for my 3 yr old daughter which was most important.

[Karl]

Sandy, I spent several years in California while in the military and I can see the draw of the place. Every now and then I wish I could move out there with my family, but the housing costs are astronomical. I don't understand why--it's a big state so you think there would be plenty of room for new development. It seems odd to me. A guy at work brought back a real estate flyer from Palm Springs and homes seemed fairly cheap there--in the $150,000 range for a nice stick-built ranch. Maybe there's no demand in Palm Springs like there is in other areas. If you like a warm (though humid) climate, perhaps you could move to the Florida Panhandle. There, housing costs are lower than just about anywhere in the nation, and mobile homes sell real cheap. The schools, as far as I know, are also good. Just a thought. It irritates me to read about price gougers.

[Sandy]

Hi Karl,
You know it really is interesting why the prices for site built houses are so much. The city that I live in, Torrance, is about 20 miles south of LA and about 3 miles from the beach. It is very populated area however the new housing developments going up here are so unaffordable that I honestly don't understand who is buying these new homes. First of all, new homes are being built so large. Two-story, 2500-3500 sq. ft. homes. Starting prices are $400,000. Who can afford that? Like I said in my other posts, old nothing homes in this area are upwards of $250,000. Moving is not really an option as we moved here from Hawaii in 1996. Now that we are established I don't want to move again. It's just such a shame that greed makes it so impossible for everyone to have a nice house. At least we could get a MH and have a house for my daughter. Thanks for listening!

[Karl]

I wonder if you could find a lot outside of Torrence (I know there are no small towns left around there!) and put a small modular on it. These are not manufactured homes -- they are more like stick-built homes-- but I know they can be purchased cheaply, especially if you go without a basement. I would recommend a couple of websites: www.cresthomes.com and www.allamericanhomes.com. Or go on a web search for "modular homes." Then again, I don;'t know if any of these homes are available on the west coast.

[Sandy]

Karl,
There are certainly no lots around here to purchase and if there were they would cost a fortune. This area is litterally one city next to another from here to San Diego, I am perfectly happy in my home and would not want to move. There are house, brand new that are not as expensive, $150,000 or so but they are out in the boonies. People that I work with drive 2 hours one way to own an affordable house. Not me. I know that my MH being in a park on rented land will most likely depreciate over time but I don't plan on moving anytime soon and did not buy it for an investment purpose. We put $30,000 down have a 20 loan. At least we have some tax benefits and again, a nice comfortable home that we own and not all of our money is going down the drain. Thanks for all your input!