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