Blog Posting # 784, Copyright 15 March 2024. EducateMHC
Know this! HUD-Code manufactured housing (‘MH’) is federally-regulated, performance-based, affordable & attainable factory-built housing (a.k.a. offsite construction). And land lease communities (a.k.a. manufactured home communities & ‘mobile home parks’) comprise the commercial real estate (‘CRE’) component of MH! And EducateMHC is the online advocate, official historian, trend tracker, and information resource for both business models. Access EducateMHC via (317) 881-3815 email: gfa7156@aol.com, & visit www.educatemhc.com to order Community Management in the Manufactured Housing Industry. This is the sole MH-focused professional property management text in print today! And 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 as a USMC lieutenant, a 45 year entrepreneur business career in MH & community ownership, as well as author and freelance consultant.
George Allen, CPM®Emeritus, MHM®Master, is the only 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 editor at large & Allen Legacy columnist, Vietnam combat veteran & retired lieutenant colonel of U.S. Marines, as well as author/editor of 20 nonfiction books & chapbooks re MH, communities, business management & prayer.
Who Sez (‘says’)?
Geesh! We’re only three months into year 2024, and already MH neophytes, from outside our industry, are prognosticating (‘predicting’) HUD-Code manufactured housing production performance for the year ahead.
The Information Management Network (‘IMN’), “…a global media & events company”, via email from one of its events planners, recently announced “Manufactured housing is expecting a 10.2% growth this year, with shipments expecting to surpass 130,000” (presumably new HUD-Code manufactured homes).
The last time the MH industry surpassed 130,000 new HUD-Code homes was during year 2003 (That’s 21 years ago!) when 130,940 units shipped (some say 130,937). According to our industry’s historian, 2003 was the ‘Year of the HUDULAR’ – when we toyed with the concept of melding HUD-Code & modular homes; but turned out to be a non-starter. The following year, 2004, production decline continued to 129,902 units (some say 129,802), the year when the Urban Land Institute (‘ULI’) formed the short-lived (10 years) Manufactured Housing Communities Council or MHCC. And during year 2005, as production continued to decline, the new trade term ‘land lease community’ appeared. And the MH tale of production woe continued till year 2009 when we produced a paltry 49,789+/- new HUD-Code homes.
Since year 2010 we’ve been on a steady but slow production climb, finally reaching a new acme of 118,886 new homes during year 2022. Year 2023? Sad to say, only 89,169 units.
OK, but back to the IMN projection. A 10.2% increase in production over last year’s 89,169 new HUD-Code homes produced suggests a 2024 total of 98,264 units, not their 130,000 – or a difference of 31,736 units.. So, why the big difference? You’ll have to ask the folk at IMN at their 2nd Annual Manufactured Housing Forum, 7 & 8 May in Scottsdale, AZ.
Where do I think we’ll be, production-wise, by year end 2024. Far too early to tell. My 4 March 2024 MHShipment Volume report, documenting January 2024 MH production cited 7,475 new HUD-Code homes. That’s 524 more new HUD-Code homes than was produced during January 2023, a 7.5% increase. Will this continued during the months ahead? For further insight, read the next portion of this week’s blog posting….
And There’s More…
There is yet another opinion ‘out & about’ these days, titled: ‘Marketing Manufactured Homes in 2024. What does thaat data tell us?’ (Distributed by BILD Media on 29 February 2024)
In it David Finney, founder & owner of Bild Media, a digital marketing agency for the MH industry, begins by reviewing where new HUD-Code manufactured housing has been, production wise, during the last six years. While he does not specify yearend total production for 2024, remember, it was 89,169 units
Then he makes the following statement: “The good news is that there is tremendous opportunity for us in the overall housing market, and there’s no reason the (manufactured housing) industry cannot resume its growth in 2024 and beyond.” My rejoinder (‘reply’)? Perhaps, but I seriously doubt it. Why? Because I’m not convinced our Big 3-C HUD-code housing manufacturers, who garner 70+/- percent of national MH market share, really want to increase volume as much as they desire to increase profit margins, more easily attained when marketing and selling larger new homes (e.g. Cross-Mod®). Someone care to opine otherwise?
Next point? Finney goes on to state: “As retailers, manufacturers, lenders, etc., in the (manufactured housing) industry advertise more, MH search traffic should be trending up.” Again; not so sure about this occurring. Why? Because, to date, HUD-Code housing manufacturers have NOT pooled resources, via MHI or anywhere else for that matter, to advertise our factory-built housing product nationally – though requested to do so many times in the past. The only advertising increase seems to be coming from three of the two dozen or so brands on the market today. Period.
Finally, the author goes on to demonstrate “Just 16% of homes for sale in 2023 were affordable.” (i.e. ‘Share of home listings affordable on median income’). Readers of this weekly blog, who know me, already know what my ‘problem’ is with this statement: the use of the word ‘affordable’ without defining what is meant by it!*1 Lesson to be learned? Whenever you see or read the words ‘affordable housing’ – without an accompanying clear definition, its use is immediately ‘suspect’, as to applicability, degree, and usefulness.
Bild Media’s message continues, but I decline to parse any more of it in this blog.
End Note.
- Definition of ‘affordable’, as in housing, and quoted from SWAN SONG, p.44. “Housing is affordable when an individual or household’s Annual Gross Income (‘AGI’), or local housing market’s Area Median Income (‘AMI’) – identified by postal zip code & available online at zipwho.com, can lease a conventional apartment and or buy a home in this local housing market, using no more than 30 percent of said AGI, or AMI, for shelter and its’ related household (utility) expenses. For example: $50,000 AGI/AMI X .3 Housing Expense Factor (‘HEF’) = $15,000/year or $1,250/month, available for rent or mortgage PITI (principal, interest, taxes, insurance), & household expenses.” SWAN SONG, a History of the Land Lease Community Real Estate Asset Class & official record of MH annual production dating back to 1955, is available for purchase via www.educatemhc.com
George Allen