George Allen / EducateMHC Blog Mobile Home & Land Lease Community Advocate & Expert

Blog Posting # 817; Copyright 1 November 2024. EducateMHC

Know this! HUD-Code manufactured housing (‘MH’) is federally-regulated, performance-based, affordable-attainable, factory-built housing (a.k.a. another type of offsite construction). And land lease communities (a.k.a. manufactured home communities & ‘mobile home parks’), comprise the commercial real estate (‘CRS’) component of MH! EducateMHC is the online advocate, official historian, trade term & trend tracker, as well as information resource for both business models, and to a lesser extent, the recreational vehicle (‘RV’) industry. Access EducateMHC via (317) 881-3815; email: gfa7156@aol.com, and via www.educatmhc.com to purchase Community Management in the Manufactured Housing Industry and SWAN SONG – a history of land lease communities & official record of annual MH production totals since 1955. Also my autobiography, From SmittyAlpha6 to MHMaven, describes personal combat adventures in Vietnam as a USMC lieutenant, a 45 year entrepreneur business career in MH & community ownership, as well as freelance consulting, and authoring many nonfiction texts.

George Allen is the sole emeritus member of the Manufactured Housing Institute (‘MHI’), a founding member of MHI’s National Communities Council (‘NCC’) division, an RV/MH Hall of Fame enshrinee, MHInsider magazine’s ‘Allen Legacy’ columnist and editor at large. He’s a Vietnam combat veteran, retired lieutenant colonel of U.S. Marines, author/editor of 30 books and chapbooks on MH, communities, business management, prayer, and figures of speech.

BROKEN PIECES & LIVES RESTORED

Do you have a friend, relative, employee; maybe even yourself, caught up in one or another type addiction or affliction? Well, this week’s blog posting is taking a detour from our usual MH business foci to introduce you to a new book recently published by a veteran land lease community portfolio owner/operator, Katie Hauck. You’ll recognize Ken and Katie Hauck’s firm as Hauck Homes of IL & TN.

‘From These BROKEN PIECES’ is not your usual literary fare, as it’s neither a novel nor nonfiction ‘read’; but rather, a collection of nearly three dozen true personal stories of individual affliction and redemption.

So, if you have a family member, friend, or casual acquaintance who’s trapped in a lifestyle of crime, addiction, or is a victim of tragedy or eating disorder, you (they) need to read this book!

And herein, redemption describes actual experiences of individuals rescued from various forms of addiction, abuse, and other antisocial and unhealthy lifestyle and relationships.

The book begins with the author telling, in casual story-telling fashion, her own experience of early marriage, divorce, and raising two children alone. Then finding new life – and love, via Bible study, church, prayer, and ‘an amazing man who later became my husband.’ At that point she jumps right into sharing compelling short stories, some would say testimonies, of young men and women, some older, who find themselves trapped in self-destructive lifestyle – but wanting to break those cycles and find a way out. Here are the first paragraphs of a couple of these heartwarming tales.

THE WALK AWAY

            “Charlie tugged on her aunt’s sleeve until she leaned closer. Charlie whispered into her ear, ‘Please help me get my mother away from him. Get her out of the situation she’s in.’ Her words turned into a prayer, ‘Lord, please save my mom.’

            Her mom, Tara, had stayed away to hide the bruises on her face, trapped in the toxic relationship that put them there. Trapped from all the decisions in her past that had gotten her to this point. She’d grown up with a good family and a grandfather who always kept them in church, but she’d developed a lying problem. It only got worse in her teen years. She would be whoever and do whatever was necessary to fit in.” p.93

FREE FALLING

            “Terror filled Jayme as she stared down at the earth thousands of feet below. Underneath the bubbling fear was a boiling excitement, It was time to leave the plane, and something told her that she would love this.

            She took a deep breath and jumped, wind whipping at her face. Her arms were outstretched as the world zipped by. This is what freedom feels lie, she thought. This is what loving feels like.

            Free falling 15,000 feet from an airplane felt like going a month without binging and purging herself. Bulimia had ruled her life. Her childhood perfectionism grew into a check-the-box relationship with God, food-restricting diet, and over-exercising, it ate away at her. Her relationship with her husband broke down. Finally, she left him and fled to Florida.” P.73

And this isn’t all ‘From These BROKEN PIECES’ has to offer. Following each short story there’s a one page open-outline featuring questions for the reader (i.e. the afflicted, the victimized) to answer, along with gentle recommendations on how to break that troublesome cycle.

Yes, as compelling and engaging a read as this book is, its’ true value lies in describing the practical paths available today for individuals who, as was sated earlier, are afflicted or victimized, and in need of redemption and recovery. So, consider ordering a copy of the book for your edification; consider ordering copies for friends, family members, employees or acquaintances who will likely benefit from reading these true, life-changing stories.

The book is available on amazon.com. Just be sure to designate: From These Broken Pieces, Katie Hauck Ministries.

George Allen

Blot Posting # 816; Copyright 25 October 2024. EducateMHC

Know this! HUD-Code manufactured housing (‘MH’) is federally-regulated, performance-based, affordable-attainable, factory-built housing (a.k.a. another type of offsite construction). And land lease communities (a.k.a. manufactured home communities & ‘mobile home parks_, comprise the commercial real estate (‘CRS’) component of MH! EducateMHC is the online advocate, official historian, trade term & trend tracker, as well as information resource for both business models, and to a lesser extent, the recreational vehicle (“RV’) industry. Access EducateMHC via (317) 881-3815; email: gfa7156@aol.com, and via www.educatemhc.com to purchase Community Management in the Manufactured Housing Industry and SWAN SONG – a history of land lease communities & official record of annual MH production totals since 1955. Also my autobiography, From SmittyAlpha6 to MHMaven, describes personal combat adventures in Vietnam as a USMC lieutenant, a 45 year entrepreneur business career in MH & community ownership, as well as freelance consulting, and authoring many nonfiction texts.

George Allen is the sole emeritus member of the Manufactured Housing Institute (‘MHI’), a founding board member of MHI’s National Communities Council (‘NCC’) division, an RV/MH Hall of Fame enshrinee, MHInsider magazine’s ‘Allen Legacy’ columnist and editor at large. He’s a Vietnam combat veteran, retired lieutenant Colonel of U.S. Marines, author/editor of 30 books and chapbooks on MH, communities, business management, prayer, and figures of speech.

American Community Survey (‘ACS’) Data Stuns!

Census Bureau recently released new ACS data showing, in 2023, “…a record high 22.0 million renter households spent at least 30 percent of their income on housing.”

And “Rent increases outpaced renter income growth.” In 2023, median gross rent (including utilities) paid by renters was $1,406month – up 8 percent from previous year.

“Multiple factors raising costs of homeownership.” Median monthly cost for 51.6 million homeowners, with a mortgage, was $1,904. Why so high? Rising property taxes, insurance premiums, and other non-mortgage costs.

“Homeownership rates among households under age 35 decreased 0.5 percentage points to 2022-2023 to 36.1 percent.” This offset by higher rates among older households kept national homeownership rate at 65.2 percent in 2023.

“…the homeownership rate for black households remained 27.7 percentage points below the homeownership rate for white households (72.4 percent).” Homeownership rate among Hispanic households? (51.0 percent). Asian households @ 63.4 percent.

Household growth has been hot since the pandemic, but is now slowing. In 2010-2019, the US averaged 915,000 new households annually; then 2.33 in 2022; and, now 1.46 million in 2023.

“…the number of renter households living in single-family homes increased by 22,000 in 2023, the first growth in this rental housing stock since 2016. Total? 14.3 million Renter households lived in single-family homes last year.”

Have You Heard of the ‘1792 Exchange’?

It’s a 501©(3), educational, non-profit organization whose mission is to “preserve freedom by steering public companies back to neutral on ideological issues.” What’s that mean? Well, in a recent Press Release, the organization’s CEO urged “America’s top business leaders to take a stand against stakeholder capitalism and ditch divisive agendas.” that was first proposed at the 2019 Business Roundtable with 200 chief executives present.

1792 Exchange’s goal? Encourage business executives to reevaluate stakeholder-driven governance (as opposed to supporting shareholders & maximizing value), and get back to the business of doing business.

Recommend you research the ‘1792 Exchange’ online to learn more and form your own opinion of their actions and how their goal might relate to your corporate interests.

HUD Changes Monitoring Contractor

HUD’s Office of Manufactured Housing Programs (‘OMHP’) “has secured the services of a new monitoring contractor for the Federal Manufactured Housing Installation Program. The firm? Tribal One, replacing SEBA Professional Services.

Effective immediately all installer applications, HUD Forms 306, 307, 308, & 309 should go to Tribal One.

Contact information? Mailing address: 6161 S. Syracuse Way, Ste # 280, Greenwood Village, CO. 80111. Email: MHIPservices@tribal.one  And phone: (719) 675-6720. Points of contact: Peter Uson & Jeff Simpson.

Personally, I lost faith in HUD’s administration of the manufactured housing installation program when it decided, several years ago, to ignore the practicality and engineering integrity and efficacy of the Frost Free Foundation (‘FFF’) system originally proposed by industry consultant George Porter. In my opinion, if everyone (i.e. land lease community owners/operators) nationwide faithfully and rightfully used FFF to install and secure all HUD-Code manufactured homes, ‘everyone’ would be in compliance, not just the mishmash of compliant and noncompliant states we endure today.

Have You Signed Up to Attend MH2X Yet?

MH2X is SECO’s initiative to double 2025 production of manufactured homes, by encouraging community owners/operators to buy and sell new HUD-Code homes to fill vacant rental homesites and upgrade their properties.

Next MH2X Workshop will occur 20 & 21 November 2024, at the Country Inn &u Suites at 4500 Circle 75 Parkway, Atlanta, GA. 30339.

What’s involved? A dozen presenters, a community tour, templates, document and files, practical examples, and superb interpersonal and corporate networking. For more information and to register, visit contact@secoconference.com

Who will be present? In addition to owners/operators of land lease communities and property portfolios, there’ll be Business Development Executives present from all three Big-C HUD-Code housing manufacturers: CAVCO, Champion/Skyline, Clayton, and Live Oaks Homes.

What would it mean to ‘double 2025 production of manufactured homes’? Well, in 2022 our industry produced a century-to-date (‘CTD’) record high of 112,886 new MHs. The next year, in 2023, that total dropped to 89,169. And we can expect that decline to continue unless land lease community owners/operators (‘You!’) buy more new homes to place onto rental homesites within your properties. It’s entirely possible, with your efforts, to see year 2025 end with 170,000 new MHs produced (i.e. that’s roughly double the 89,169 produced back in 2023.

So, will we see you at this and future MH2X Workshops? Sure hope so! And if you can’t make it to this one, plan to be present at the Louisville MHShow, 15-17 January 2025, as that’s likely where the next MH2X Workshop will be held.

George Allen

Blog Posting # 815; Copyright 18 October 2024. EducateMHC

Know this! HUD-Code manufactured housing (’MH’) is federally-regulated, performance-based, affordable –attainable, factory-built housing (a.k.a. another type of offsite construction). And land lease communities (a.k.a. manufactured home communities & ‘mobile home parks’), comprise the commercial real estate (‘CRS’) component of MH! EducateMHC is the online advocate, official historian, trade term & trend tracker, as well as information resource or both business models, and to a lesser extent, the recreational vehicle (‘RV’) industry. Access EducateMHC via 9317) 881-3815; email: gfa7156@aol.com, and via www.educatemhc.com to purchase Community Management in the Manufactured Housing Industry and SWAN SONG – a history of land lease communities & official record of annual MH production totals since 1955. Also my autobiography, From SmittyAlpha6 to MHMaven, describes personal combat adventures in Vietnam as a USMC lieutenant, a 45 year entrepreneur business career in MH & community ownership, as well as freelance consulting, and authoring many nonfiction texts.

George Allen is the sole emeritus member of the Manufactured Housing Institute (‘MHI’), a founding board member of MHI’s National Communities Council (‘NCC’) division, an RV/MH Hall of Fame enshrinee, MHInsider magazine’s ‘Allen Legacy’ columnist and editor at large. He’s a Vietnam combat veteran, retired lieutenant colonel of U.S. Marines, author/editor of 30 books and chapbooks on MH, communities, business management, prayer, and figures of speech.

EXPECTED & UNINTENDED CONSEQUENCES

During the month of October we are 5/6ths of the way through the 2024 hurricane season in the Caribbean basin and Gulf of Mexico. And what a damaging hurricane season it’s been these past several weeks, with Hurricanes Helene and Milton ravaging much of southeast U.S.

Consequences of Category 4 Hurricane Helene? According to information supplied by Texas based manufactured housing industry consultant Kurt Kelley. Reach him via www.mobileagency.com & (800) 458-4320, ext. 117.

Flooding, this time around, caused five to six times more damage than wind alone.

Some of the worst damage occurred in western North Carolina (400 miles from the Gulf), where flooding was catastrophic.

Less than three percent of homeowners carry flood insurance nationally, though Florida has the highest rate of flood insured properties.

Total hurricane property losses are estimated to be $39 billion, and uninsured flood losses to be $28 billion

Bottom line? Vast majority of NFIP covered flood losses are expected to be in Florida and related to storm surge – where mortgaged homes have to have coverage. However, in North Carolina, flood damage prevailed but very few homeowners carried flood insurance.

Furthermore, due to amount and cost of storm damage, Florida homeowners routinely see insurance rates up and availability down. In the past, insurers expected homes to be badly damaged or totally destroyed every 100 years. Now that period has been reduced to every 20 years. And, insurance rates in southern Florida are oft 5 percent of the value of the house, meaning a home worth $1,000,000may have a monthly insurance premium of $4,200 with a deductible of $50,000 or more.

Anything positive come out of these recent hurricane experiences?  Well, improved building standards in coastal areas resulted in less wind damage than projected.

So, what’s been an unintended consequence of the recent hurricanes? More sales and placements of new HUD-Code manufactured homes in land lease communities throughout the southeast, but outside of Florida. Here’re some recent communiques from community owners/operators in that region:

“We are going absolutely bonkers with the expansion of our new (100 rental homesites) community, along with the sale of new MHs to fill said sites. As fast as we can get homes ready to sell we’re selling them. And it’s not unusual for us to sell before they’re even ready! Prospective homebuyers/site lessees are even purchasing new homes that won’t be delivered until the end of the year. People love the new MHs. They also love our new development – as everything looks so nice and inviting. Wish I had another project to move to once we fill this one.” (Lightly edited. GFA)

“We are experiencing the same thing in our Georgia properties, where we’re having homes reserved with hard deposits at the time we order the new (manufactured) home. Never seen anything like it in the last seven years. The one caveat is that we have to order the right homes. Single 16X76, 3BR, 2B units are our most popular model right now.”

ANOTHER SOURCE OF MH INDUSTRY STATISTICS

OK, I’ve been around manufactured housing for a while – like nearly 50 years, but this is the first I’ve heard of SkyView Advisors and their monthly national sales report on ‘Manufactured Housing’. Their report for August 2024 suggests 54 (presumably land lease communities, a.k.a. manufactured home communities) sold for $130,452,400, and at $88,685 average selling price per (again, presumably) rental homesite; and an average of 90 sites per property sold.

Now, here’s what isn’t clear to me. Is that data just for the month of August 2024 or is it a year to date total, i.e. 54 communities @ $130,452,400.? Furthermore, is this in transactions that regularly occur between and among property portfolio owners/operators? Just wondering….

For more information, get in touch with Jared Bosch or Don Vedeen via jbosch@skyviewadvisors.com & dvedeen@skyviewadvisors.com

SECO ANNOUNCES NEXT ‘MH2X’CLASS

SECO’s MH2X Community Infill & Upgrade Workshop will be held on 20 & 21 November 2024, at the Country Inn & Suites in Atlanta, GA. For more information and to register, visit contact@secoconference.com

You’ll recall that the mission of MH2C workshops is to encourage and facilitate the doubling of 2025 manufactured housing production, by encouraging land lease community owners to buy and sell new manufactured homes to fill vacant rental homesites and upgrade their properties.

What does this mean? Well year 2023 total production of new manufactured homes was at 89,169 units, ‘down’ from the 2022 total of 112,886 new MHs. So there’s a long way to go and no one else, other than SECO & the MH2X workshops are trying to get us back over the 100,000/year benchmark. Bottom line? To produce 175,000 new HUD-Code manufactured homes by year end 2025! So, help us get there by attending this next MH2X Workshop in Atlanta, GA!

George Allen

Blog Posting # 814; Copyright 11 October 2024. EducateMHC

Know this! HUD-Code manufactured housing (‘MH’) is federally-regulated, performance-based, affordable-attainable, factory-built housing (a.k.a. another type of offsite construction). And land lease communities (a.k.a. manufactured home communities & ‘mobile home parks’), comprise the commercial real estate (‘CRS’) component of MH! EducateMHC is the online advocate, official historian, trade term & trend tracker, as well as information resource for both business models, and to a lesser extent, the recreational vehicle (‘RV’) industry. Access EducateMHC via (317) 881-3815; email: gfa7156@aol.com, and via www.educatemhc.com to purchase Community Management in the Manufactured Housing Industry and SWAN SONG – a history of land lease communities & official record of annual MH production totals since 1955. Also my autobiography, From SmittyAlpha6 to MHMaven, describes personal combat adventures in Vietnam as a USMC lieutenant, a 45 year entrepreneur business career in MH & community ownership, as well as freelance consultant and author of many nonfiction texts.

George Allen is the sole emeritus member of the Manufactured Housing Institutes (‘MHII’), a founding board member of MHI’s National Communities Council (‘NCC’) division, an RV/MH Hall of Fame enshrinee, and MHInsider magazine’s ‘Allen Legacy’ columnist & editor at large. He’s a Vietnam combat veteran, retired lieutenant colonel of U.S. Marines, author/editor of 30 books and chapbooks on MH, communities, business management, prayer, and figures of speech.

The ‘Whole U.S. Housing Story’ Explanation

What is the ‘Whole U.S. Housing Story’? What types of single-family residential housing are included in this new monthly comprehensive statistical survey? Well, here goes:

Offsite construction. This new housing category, a.k.a. factory-built housing, includes HUD-Code manufactured housing, modular & panelized (or ‘prefab’) housing, and Park Model recreational vehicles (‘RVs’).

(&) Single-family, site-built housing ‘starts’. This larger housing category has long been the all-inclusive measure of housing performance in the U.S., not including the offsite construction types just cited, except for HUD-Code manufactured housing sited on permanent foundations.

So, where does this housing data originate? The easiest to track is the number of single-family, site-built housing ‘starts’ researched and published monthly online by the U.S. Census Bureau. Visit: census.gov/construction/nrc/pdf/newresconst/pdf

But offsite construction involves two different sources and a calculation.

HUD-Code manufactured housing monthly production is tracked by the Institute for building Technology & Safety (‘IBTS’) and sold to subscribers. Annual production totals? In the book SWAN SONG, dating back to 1955. Visit www.educatemhc.com

Modular & panelized (‘prefab’) housing monthly production. Since these units are built to local building codes and no one tacks either category, some housing professionals suggest the following formula: 2% of annualized monthly housing starts per U.S. Census Bureau , reduced to a monthly total, e.g. 1,150,000 X .02, divided by 12 months = 2500 ‘mods’ & panelized units.

Park Model RV production is tracked monthly by the Recreational Vehicle Industry Association and totals are published in RVIA’s online publication RVIA News. This category of offsite construction is included, as an increasing number of Park Model RVs are used as permanent housing, particularly in Sunbelt regions.

The Whole U.S. Housing Story for August 2024

Format for data that follows: First, the three categories of offsite construction, then a subtotal, followed by U.S. Census Bureau estimate of single-family site-built housing for August 2024. Finally, a grand total of all categories together, but with the number of modular & panelized units adjusted out, so as not to be counted twice.

1. HUD-Code manufactured housing units in August:   9,501
2. Modular & panelized (‘prefab’) units in August:       2,260
3. Park Model RVs in August                                             299
4. Offsite construction subtotal in August                     12,060

• Census Bureau # of housing starts in August      1,356,000
• (+) Offsite construction subtotal in August             +12,060
• Grand total of U.S. housing starts in August        1,368,060
• (-) 2,260 Modular & panelized (‘prefab’) units    1,365,800        

Bottom line ‘Whole U.S. Housing Story’ for August 2024? 1,365,800 new homes started! 

Mfd. Hsng. Shipment Volume @ August 2024

IBTS reports 9,501 HUD-Code homes produced during August 2024, up from 7,896 during the previous months, and up from 8,670 produced during August 2023. 14,968 floors produced.

Year to date (YTD) MH production thru August 2024 = 68,562; up from 58,692 during year 2023.

Production value? Based on decade+ old ‘per unit’ factor of $43,126; August 2024 production is valued at $409 million; and year to date national economic impact = $2.95 billion. This is a gross undervaluation of new HUD-Code manufactured housing production.  This ‘old factor’ needs to be reviewed, researched, and updated NOW! GFA

Stock Market Report on 4 October 2024

BRK-A              Berkshire Hathaway, Inc. (Clayton Homes)   $687

SKY.                 Skyline Champion Corporation                      $92.93

CVCO               Cavco Industries, Inc.                                     $422.50

LEGH               Legacy Housing Corporation                          $26.54

NOBH              Nobility Homes                                               $35.26

ELS                   Equity Lifestyle, Inc.                                        $68.28

SUI                   Sun Communities, Inc.                                   $129.87

UMH               UMH Properties, Inc.                                      $19.03

TSC                  Flagship Communities, Inc.                            $15.06

MHPC              Mfd. Hsng. Properties, Inc.                             $.62

Manufactured housing/land lease community Composite Stock Index (‘CSI’) on 4 October = $811; down from $901 in September, yet above the base of $790.07 set in January 2022.

CSI does not include BRK-A.

FHFA’s new Manufactured House Price Index

The Federal Housing Finance Agency, on 9 October 2024, released its new Manufactured Housing Price Index.

Simply put, ‘House price indexes for manufactured homes increased by 7.9 percent between second quarters of 2023 and 2024. They increased by 3.2 percent in the second quarter of 2024 compared with the first quarter.” And “In the second quarter of 2024, the median price of manufactured homes for sale was $231,000. This represents an increase of $1,000 from the second quarter of 2023.”

Does this median price seem a bit high to you? That’s likely because “The price indexes and median prices for manufactured homes are both based on data from real-property conventional mortgages acquired by Fannie Mae & Freddie Mac.”

A Call for Comment & Recommendation…

So, what do you think of this new overview of all housing types produced and started in the U.S. during August 2024, along with a detailed summary of HUD-Code housing production and stock market prices for five public HUD-Code housing manufacturers and five land lease community property portfolio owners/operators? Plus information from a brand new FHFA manufactured house price index, released on 9 October 2024. Please let us know your thoughts and reactions via gfa7156@aol.com

George Allen

Blog Posting # 813; Copyright 4 October 2024. EducateMHC

Know this! HUD-Code manufactured housing (‘MH’) is federally-regulated, performance-based, affordable-attainable, factory-built housing (a.k.a. another type of offsite construction). And land lease communities (a.k.a. manufactured home communities & ‘mobile home parks’), comprise the commercial real estate (‘CRS’) component of MH! EducateMHC is the online advocate, official historian, trade term & trend tracker, as well as information resource for both business models, and to a lesser extent the recreational vehicle (‘RV’) industry. Access EducateMHC via (317) 881-3815; email: gfa7156@aol.com, and via www.educatemhc.com, to purchase Community Management in the Manufactured Housing Industry and SWAN SONG – a history of land lease communities & official record of annual MH Productions totals since 1955. And my autobiography, From SmittyAlpha6 to MHMaven, describes personal combat adventures in Vietnam as a USMC lieutenant, a 45 year entrepreneur business career in MH & community ownership, as well as freelance consultant and author of many nonfiction texts.

George Allen is the sole emeritus member of the Manufactured Housing Institute (‘MHI’), a founding board member of MHI”s National Communities Council (‘NCC’) division, an RV/MH Hall of Fame enshrinee, and MHInsider magazine’s ‘Allen Legacy’ columnist & editor at large. He’s a Vietnam combat veteran, retired lieutenant colonel of U.S. Marines, author/editor of 30 books and chapbooks on MH, communities, business management prayer & figures of speech.

‘Upside Down in a Mobile Home Park’

By

George Allen

The title ‘Upside Down…’ caught my eye as I browsed among art films in a local video store. Rented the film, took it home, and here’s what we viewed.

The movie’s setting is unclear. It could easily have been in New England, the Southeast, or the Pacific Northwest, though I’ve seen similar manufactured home communities in the rural Midwest. No question however, this was an upscale land lease community installing new multisection manufactured homes onsite at the turn of the century.

Central characters were a young couple, George & Carolyn, buying their first home. Both employed, no children or pets, and two older cars. And there was H. ‘Itch’ Balle, the retail sales center salesman/manager. Film begins with George reading a classified ad:

‘L(.)(.)K

New Homes for Sale in Sherwood Forest Estates’

What catches his eye, besides the nearby location, is the $4,000 move-in incentive offer! George phones; he and Carolyn visit; really like what they see, and buy! Their new home, already sited, but not yet landscaped, is an $80,000 multisection HUD-Code manufactured home. (Remember, this is back around year 2000).

Everything seemed to be going their way! Originally expecting to have to come up with $4,500.00 down payment, they only paid $500.00! How so? The $4,000.00 ‘move-in incentive’ was graciously applied ty the retailer/developer, to improve their homesite with shrubs, porch, and carport. Then that amount was added to the balance they’d be financing.

Even financing arrangements were a steal! Mr. Balle arranged for them to avoid paying ‘10% over 30 years’ term (That’d mean $733.13/month payments.*1), and got them a variable rate loan of only ‘9% over 30 years’ with maximum possible increase of 2% (or two points) after one year. Their first year rate was only $672.18/month*2 on their new home mortgage!

And the Good News did not stop there! At the point in the movie when George & Carolyn suggest they might ‘shop around’ before committing to buy at Sherwood Forest, ‘Itch’ announced the entire first year’s rent of $285/month would be waived if they signed the sales contract that very day!

Now, that was a ‘no brainer’ decision if ever there was one. They’d already saved $4,000.00 on the housing down payment (Somehow they thought they’d be paying off less than $83,500.00 though…); were saving $60.95/month on the loan payment or $731.40 per year; and now, a ‘signing bonus’ (Just like a pro athlete!), they were saving yet another $3,420.00 in rent during the first year of being a resident at Sherwood Forest Estates. This was all too good to be true! No question, they signed!

Then the movie fast-forwarded a year and a month into the future. The euphoric sales center scene of 13 months ago is now a distant bittersweet memory. During the past year, Carolyn had become pregnant and was no longer working. And with the extra money from the ‘house deal’ – more than $4,000.00 in down payment and mortgage savings, waived rent, and no security deposit (forgot to mention that little gem earlier), they’d bought an expensive new Ford SUB on payments.

It was bill-paying day and George & Carolyn were out of money. Their variable rate mortgage payment had just jumped from $672.18/month to almost $800.00/month*3 – not including property taxes and homeowner insurance commitments. And a previously unknown notice had just arrived, a monthly site rent bill of not $285.00/month, but $300.00/month, due to an annual rent increase. Where in the world were they going to come up with at least an extra $400.00/month, on just one salary, to pay rent, mortgage, payments on the new car, with a baby on the way?

As the movie ended, this couple was, in effect, completely upside down in their financial commitments and responsibilities – with no way out, but to walk away from their new dream home. The epilogue, through a voice-over by a moderator listed the winners and losers in this housing transaction mishap.

’Winners. Commissioned salespersons selling new homes. Lenders providing high interest chattel mortgages. Developers intent on filling new communities within a year, then flipping to the highest bidder. Homeowner/site lessee during the first year of residency.

Losers. The HUD-Code manufactured housing industry’s image and reputation! Lenders risking repossession and losing money, but able to resell and originate new loans. Salespersons setting homebuyers up for failure will likely suffer consequences somewhere, somehow, along the line. And developers earn a reputation for profiteering.

As I contemplated an appropriate moral, lesson learned, or summary, for ‘Upside Down in a Mobile Home Park’ several came to mind: a little Latin, a slang expression, a Biblical admonition, and a quote from the late Gub Mix’s popular column, ‘From My Soapbox’.

• Caveat emptor…”Let the buyer beware!”

• ‘A sucker is born every minute’

• The Golden Rule: ‘Do unto others as you would have them do unto you.’ Matthew 7:12. Some would add this Gold Rule: “He who has the gold rules!”

• “…manufactured housing industry devotes an extraordinary amount of its’ resources to sell homes to people who really aren’t qualified home buyers. Why? Because they allow us to sell the ‘old mobile home way’…it’s easier than attempting to sell to qualified buyers who require a lot more effort. Manufactured housing may be the only industry in America that ignores the customer’s desires in their marketing practices. Unfortunately for us, potential buyers are much more savvy these days and appear to be abandoning us in droves.” June 2000

Hmm. Perhaps that’s why, 15 years after enduring our industry’s worst production year ever (i.e. 2009 = 48,789 new MHs), we continue to find it difficult to consistently reach and exceed the aforementioned industry standard of 100,000 new HUD-Code manufactured homes produced per year.

End Notes.

1. $80,000 (-) $500 DP + $4,000 add back = $83,500 (or 83.5) X 8.78 loan factor = $733.13/month

• $83,500 (or 83.5) X 8.05 loan factor = $672.18/month

• $83,500 (or 83.5) X 9.52 loan factor = $794.92/month

Know what? If, as an industry, we’re not careful to produce a quality home at an affordable-attainable price, ‘others out there’ might well drive our national market share lower. Here’re two examples:

Amazon.com now markets an entire line of attractive foldable homes on line, beginning at $19,000.00 apiece. Check it out.

And Volferda Capsule Houses are emerging in several markets. Not my desire or interest, but surely designs and features attractive to others, particularly young homebuyers.

If you’d like to share your thoughts on this panoply of housing matters, reach me via gfa7156@aol.com

George Allen