Blog Posting # 769, Copyright 1 December 2023. EducateMHC
Parallel Perspectives. HUD-Code manufactured housing is federally-regulated, performance-based, affordable & attainable factory-built housing! And, land lease communities (a.k.a. manufactured home communities & ‘mobile home parks’) comprise the investment real estate component of manufactured housing! EducateMHC is the online advocate, historian, trend tracker, and text resource for these two related business models! Reach EducateMHC by phoning (317) 881-3815; email: gfa7156@aol.com, or visit www.educatemhc.com; and to order Community Management in the Manufactured Housing Industry. This is the sole professional property management text in print today! SWAN SONG is a history of land lease communities & official record of annual MH production totals since 1955; and, my autobiography, from SmittyAlpha6! to MHMaven – describes personal combat adventures in Vietnam, a 45 year business career in MH and community ownership/management, and as author/consultant.
George Allen, CPM®Emeritus, MHM®Master, is only emeritus member of the Manufactured Housing Institute (‘MHI’), an RV/MH Hall of Fame enshrinee, retired lieutenant colonel of U.S. Marines, & author/editor of 20 books re MH, communities, business management & prayer.
TROUBLING STATS!
According to HUD, and published in the September/October 2023 issue of ‘Affordable Housing Finance’ magazine, on page # 10:
“8.53 million renter households, during 2021 (last year data available) were identified as being ‘worst case needs’. These households have incomes at or below 50 percent of the area median income (‘AMI’), do not receive government housing assistance, and pay more than half their income for rent, or live in severely inadequate conditions, or both!”
&
According to the Federal Housing finance Agency (‘FHFA’), “U.S. house prices rose 5.5 percent between the third quarter of 2022 and third quarter of 2023.” & “U.S. house price growth continued to accelerate in the third quarter, appreciating more than in each of the previous four quarters” – according to Dr. Anju Vajja, FFHA’s associate director of research and statistics.
MANUFACTURER FOCUS ON LAND LEASE COMMUNITIES
The ‘CAVCO Launches a National Community Sales Team’ headline in the Louisville MHShow issue of MHInsider magazine is Old News & New News. Old News because ‘manufacturer emphasis on in-land lease community new home marketing and sales’ began way back around 2010 (the year after MH hit its’ nadir level of production @ only 48,789 units), when Steve Quick of (then) Fleetwood Enterprises – since acquired by CAVCO, created a CD directory of his firm’s plants and the lines of homes they produced. This so land lease community owners/operators could direct order new homes from plants that serviced their marketing area. Also, Skyline-Champion and Clayton Homes have focused on land lease community marketing now for more than a decade. New News, because this is indeed a novel focus for CAVCO Industries. According to the MHInsider magazine story, the land lease community focused team will be fully assembled during year 2024.
Anecdotally, there are at least two other historic developments related to this challenging time (i.e. years 2000 thru 2021 – when we once again surpassed the 100,000 unit mark) in manufactured housing. First, in large part due to HUD-Code manufacturers adjusting to loss of 10,000 independent (street) MHRetailers, and focusing on in-land lease community new home marketing and sales, the percentage of new homes going from factory to on-site, increased from 15 to 40+ percent. And in 2016 the first Two Days of Plant Tours & Home Sales Seminars debuted at the RV/MH Hall of Fame in Elkhart, IN. This program has continued uninterrupted – but for one year during the pandemic – to this day. Surprising, however, this concept hasn’t been imitated elsewhere in the U.S.
SOMEONE HAS TO TELL YOU…
‘The Great Green Energy Transition That Wasn’t’ rolled across my PC screen a month ago. Here I’d like to share it with you…
“One of the textbook marketing flops of all time was the Ford Edsel sedan, which was heralded as the hot new car in the late 1950s. All the automotive experts and Ford executives said it was a can’t-miss. Henry Ford (the card was named after his son) guaranteed hundreds of thousands of sales.
But one big thing went wrong: Nobody ever bothered to ask car buyers what they thought of the new car. As it turned out, they hated it. So instead of sales of 400,000, Americans bought 10,000, and the model was embarrassingly discontinued.
The obvious lesson for the industry: You can’t bribe Americans to buy cars they don’t want. Given the all-in approach to electric vehicles at Ford and General Motors, it’s clear that Detroit never got the message.
Last week (i.e. early October), Honda and GM announced an end to their two year collaboration in building a platform for lower-cost EVs. Honda execs said it was too hard.
Amazingly, less than 10% of all new car sales over the last two years were EVs. This is despite the fact the U.S> government is writing a $7,500 check to people for buying an EV, and some states are kicking in $5,000 more. The Texas Policy Foundation calculates that all-in EV subsidies can reach $40,000 per vehicle. It would practically be cheaper for the government to purchase a new gas vehicle for every American car buyer.
Energy expert Robert Bryce estimate Ford has lost $62,000 for each EV it has rolled off the assembly line. That’s hardly a road to profitability.
Meanwhile, the news is even worse for wind and solar power. The Wall Street Journal reported last week that ‘clean energy’ investment funds are tanking, with some down as much as 70% in recent months. Solar has been one of the worst-performing industry stocks this year.”
George Allen, CPM, MHM