MH Statistics You Haven’t Seen Before!
Blog # 252 Copyright 2013 7 July 2013
Perspective. ‘Land lease lifestyle communities, a.k.a. manufactured home communities, & earlier, ‘mobile home parks’, are the real estate component of manufactured housing.’
Purpose of this blog. ‘To be a national Advocacy voice, statistical Research reporter, & communications Resource for LLLCommunities, of all sizes, throughout North America’
Surprising but Confirming Statistics
from Two Manufactured Housing Reports
‘Contemporary Archetype of Truly Affordable
Housing in the United States!’
A New Book: ‘The First 20 Years;
‘Forging Manufactured Home Community Advocacy & Networking’
From Blog Floggers (readers)….
Surprising but Confirming Statistics
From Two Manufactured Housing Reports
Almost everyone is somewhat familiar with Pareto’s Law (‘that income distribution remains constant, whatever efforts are made to change it’*1), e.g. ‘80% of a country’s wealth is held by 20% of its’ population’. Well, Pareto’s Law, a.k.a. the ‘80/20 Rule’ has long had a place in manufactured housing industry shipment history, but not the manner Vilfredo Pareto articulated it. Goes like this: In the early days (i.e. Heyday of 1970 – 1980) of ‘mobile home’ production, in round numbers, 80+/-% of total annual new home shipments were ‘singlewides’, & 20+/-% ‘doublewides’, by the time of our too brief renascence, between 1995 – 2005, when those percentages reversed, with 20+/-% being (now) ‘single section’ manufactured homes, and 80+/-% being (now) ‘multisection’ homes. Surely you remember the ‘Go Go’ Big Box = Big Bucks! Days, when land – and – home packages, sold and contracted by independent (street) MHRetailers and ‘company stores’, competing for housing market share with production (site) builders throughout the U.S.?
For a variety of reasons, that housing marketing focus didn’t work well for long, and when the HUD – Code manufactured housing industry decisively ‘lost’ its’ ready access to chattel (personal property) capital, early this century, the ‘shipment pendulum’ has been swinging away from multisection homes back toward singlesection homes. An indeterminable part of that swing can be credited to the appearance, in 2008 and thereafter, of specially – designed Community Series Homes or CSH Models, produced by many, but certainly not all, HUD – Code home manufacturers, for siting in mostly portfolio – owned land lease lifestyle communities (a.k.a. manufactured home communities) nationwide.
Now that’s another fascinating tale; but one for another time, when talking
about the return of rental units, the meteoric rise in property owner self – financing (i.e. ‘captive finance’) of home sales transactions on – site, and the just as rapidly occurring negative consequences of onerous state and federal financial regulation of the manufactured housing industry and real estate asset class.
Well, during a chance review of an ‘annual (manufactured housing) shipment chart’ in the 3 December 1212 ‘White Paper: Issues & Opportunities Facing the Illinois Manufactured Housing Industry’, by Dr. Theodore C. Alex, we learned the annual shipment volume of singlesection and multisection manufactured homes reached a point of near equilibrium in 2011, and continued all the way through year 2012 as well!
Specifically; in year 2011, 25,289 new singlesection manufactured homes were shipped, as were 26,317 multisection homes, for an annual shipment total of 51,606. Page # 7. That’s about as close to 50/50% as you’re gonna get in the HUD – code manufactured housing shipment scenario. So, what does this mean? That (some of) the HUD – Code manufactured housing industry is experiencing and dealing with change, as it hunkers down and does what’s necessary to serve those markets (e.g. 50,000+/- land lease lifestyle communities nationwide) open to this unique type of factory – built housing. While further explanation is beyond the scope of the quoted Illinois report, this specific strategy generally means designing, selling, and shipping more CSH Model homes (featuring durability – enhancing features intended to facilitate reconditioning between renters and or contract buyers of said homes), even ‘park model RVs’, into LLLCommunities throughout the U.S.
But wait! There’s a serious caveat to this ‘small ray of shipment hope’ i.e. placing more new homes into LLLCommunities, on the way to filling an estimated 250,000 vacant rental homesites nationwide. And it goes like this: Until EVERY HUD – Code home manufacturer takes this (now) five year new home shipment nadir crisis seriously (i.e. Where we’ve been ‘bouncing along the bottom’ @ 50,000+/- new homes shipped per year during this time) and FINALLY reacquaints themselves with How To Actively Market New Homes to this realty segment of the MHIndustry, the very segment ‘which brought them to this housing dance in the first place during the early 1970s’ – LLLCommunities large and small, nothing much is gonna change anytime soon! And as is oft said, figuratively speaking, ‘You can take that to the bank!’ Why that metaphor? Because, for the past decade, LLLCommunity owners/operators have, by necessity, become their own bank, financing many, if not most, of the (home) deals they sell!
Why am I so sure of this general disconnect? After five years of writing about, aggressively promoting (Often directly to HUD – code manufactured housing producers and their ‘Business Development Managers’ or BDMs), and displaying Community Series Homes, circa 2008, at every annual International Networking Roundtable (The single largest draw of LLLCommunity owners/operators each year!), the income – producing property segment of our industry, especially the 85% of 50,000 LLLCommunities containing fewer than 100 rental homesites apiece, continues to be ‘all but ignored’ by most HUD – Code home producers! There, I’ve said it out loud and in this very public online forum patronized by 1,000+/- readers. Now I’ll wait, along with you, to see ‘if and how many of’, these relatively few remaining home manufacturers take this marketing matter seriously. And as a corollary, you may or may not be aware, that more than 80% of today’s total national market share of HUD – Code manufactured housing is shipped by three ‘Big C firms’, those being Clayton Homes, Inc., at 48+/-%, Cavco Industries, Inc., & Champion Home Builders, Inc. The remaining 20+/-% of national market share is accounted for by mostly regional ‘players’, who should be – but aren’t, taking just as serious an interest in marketing new HUD – Code manufactured homes for siting within LLLCommunities.
An apt, and appropriate ‘closing sidebar’ here, has to do with training aids (the ‘Ah Ha! & Uh Oh! Worksheet’ for estimating ‘affordable’ & ‘risky’ Price Points for new & resale manufactured homes for placement within & outside LLLCommunities; AND the fresh – off – the – press ‘5 – RPs of Marketing & Selling New Homes INTO a LLLCommunity’ plastic wallet card *2) have generated little interest, let alone use, among HUD – Code home manufacturers, while being very popular among LLLCommunity folk marketing and selling homes on – site. Go figure.*3
1. Vilfredo Pareto (1848 – 1923), Italian economist and political ph8ilosopher. A vigorous opponent of socialism and liberalism, he justified inequality of income on the grounds of his empirical observations. Webster’s New World Encyclopedia
2. 5 – RPs = Right Product, Right Place, Right Price, Right Promotion, & Right People.
3. FREE copy of the ‘Ah Ha! & Uh Oh! Worksheet’ is available when one phones the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. And the set of ‘5 – RPs of Marketing & Sales of HUD – Code Manufactured Housing & Leasing of Rental Homesites’ will be distributed to all attendees at the 22nd International Networking Roundtable, 18 – 20 September 2013, in Bloomingdale, IL. Ask for agenda and registration form when phoning the HOTLINE.
Now, for that second manufactured housing report….
Have YOU obtained a copy of, and studied, the ‘2012 Mobile Home Market Facts’ report researched and recently distributed by the Foremost Insurance Group? If not, you owe it to yourself to make that effort today! It’s well worth your time and reading. Contact information later in this review.
While I’ve already reviewed some of the seminal statistics, contained in this 13 page report, in ‘the Allen CONFIDENTIAL!’ and the ‘Allen Letter professional journal’, some of the material is worth repeating here.
First off, know that Foremost’s ‘once ever four year’ report, and the annual ALLEN REPORT (a.k.a. ‘Who’s Who Among Portfolio Owners/operators of Land Lease Lifestyle Community Owners/operators Throughout North America!’) continue to be the only two professionally researched, published, and distributed ‘industry & asset class wide’ reports in the entire HUD – Code manufactured housing industry. That’s why you owe it to yourself to get a copy of this edition of Foremost’s research. There won’t be another one now until 2016!
Page # 2 pretty much ‘says it all’! “The Mobile Home market Shifts Toward Older Homes and Lower Income Households’ (e.g. “55% of mobile home owners reported an annual household income less than $30,000, representing a 16% increase from 2008.”) And there’s more….
“Single – section homes represented 59% of all units. Multi – section homes are down 8% since our 2008 study.” What did I tell you in the first half this Part I of this week’s blog posting?
And get this: “68% own or are buying their mobile home; 24% rent.” Now, there’s another ‘late 1970s trend’ – back towards ‘rental units’, that few recognize or write about these days. How come? Frankly, manufactured housing journalism is fast becoming a ‘lost art’ or worse – or so it seems – when one considers how few advertising – supported print trade publications remain (Only one!), and subscriber – supported newsletters (Only two!), along with ‘just a couple’ online ‘general & financial news’ ezines. That’s all there is! (Please excuse the tangential diatribe)
OK, I could go ‘on and on’ here, but I know what you’re most interested in learning: ‘How to get a copy of the 2012 Mobile Home Market Facts report!’ Phone Joe Kaffenberger via (616) 956-2514, and when you call, please tell him, ‘George told me to call!’
Know what I’d like to see happen in the 2016 edition of Foremost’s report? A wholesale switch away from ‘mobile home’ lingo, to ‘manufactured housing’ and ‘land lease lifestyle community’ enlightened verbiage. Will it happen? Guess we’ll have to wait (four years) and see. In the meantime, ‘get your copy’, study it, and make good use of what you learn – especially those reading this who’re HUD – Code manufactured housing producers and marketers (Just maybe someday, we’ll reverse those two function words, and see our industry embrace ‘marketing and then production’!) But don’t hold your breath.
‘Contemporary Archetype of Truly Affordable
Housing in the United States!’
OK, this is going to be ‘short & sweet’, as they say in some circles. If you’re an ‘Allen Letter professional journal’ subscriber, you’re already in the cat seat for what I’m about to tell you. If NOT, then you might want to seriously consider subscribing before the August issue of the newsletter goes into the mail. To do so, simply phone the official MHIndustry HOTLINE: (877) MFD-HSNG or 633.4764. Credit card orders welcome; annual subscription is $134.95 for 12 monthly issues and a dozen Signature Series Resource Documents (‘SSRDs’) – including a FREE copy of the annual ALLEN REPORT, and 11 other such seminal documents re ‘RE & chattel lenders, consultants, etc..
‘Contemporary Archetype of Truly Affordable Housing in the United States!’ is the lead feature article in the August issue of the newsletter. Following are the opening paragraph from this opus, a particularly ‘telling’ paragraph incorporating timely statistics form the aforementioned 2012 Foremost report, and concluding paragraph.
Allowing for inevitable and key differences among local housing markets (e.g. demographic statistics, availability of services, & employment opportunities, to name a few), low cost and priced HUD – Code manufactured homes sited in land lease lifestyle communities (a.k.a. manufactured home communities), charging rental homesite rent in sync with other forms of nearby multifamily rental housing (e.g. Usually 1/3rd the monthly rent charged for a 3BR2B conventional apartment or townhouse, assuming utilities are billed in similar fashion), continue to be the contemporary archetype (‘original model or prototype’) of truly affordable housing in the United States! How so?
Mid – article paragraph:
Neither of the two latter ‘affordable’ residual $ amounts are much to work with, in many to most local housing markets; ;but they are indeed ‘doable’ in some, if not many, blue collar, family LLLCommunities! Proof? The recently released (June 2013) ‘2012 Mobile Home Market Facts’ report, researched and published by the Foremost Insurance Group, documents, that during year 2012, 18% of manufactured housing purchase prices ranged between $10,000 & $19,000; 14% between $20,000 & $29,999; and, 13% between $30,000 & $39,999; for a total of 45% of all HUD – Code manufactured homes sold during year 2012 being priced between $10,000 & $40,000. And this 45% total does NOT include yet another 23% of manufactured homes that sold for less than $10,000.! Frankly, housing simply doesn’t get any more affordable than this combined 68% of 2012 manufactured housing purchases priced at less than $40,000 apiece.
Finally, when the 50% ‘affordable housing adjustment’, of a local housing market’s AMI (Annual Median Income) is considered, buying an inexpensive resale manufactured home, sited on a rental homesite within a LLLCommunity , is often the ONLY viable alternative an individual or family has in today’s uncertain housing market. That’s why HUD – Code manufactured homes sited in LLLCommunities remain the sole contemporary archetype of truly affordable housing in the United States today!
I’ve been writing for the HUD – Code manufactured housing industry and land lease lifestyle community real estate asset class for more than a quarter century, and at last estimate, have researched and published no fewer than 2,500 articles and newsletters, along with 11 books. Frankly, I’ve been ‘learning & waiting’ most of those 30+/- years to pen the piece I’ve just told you about, and from which I extracted those three paragraphs. My hope is that it becomes the first step, by which all of us in the industry and property type, believe, recognize, and deal with the reality that our homes and multifamily rental property type are indeed the ‘contemporary archetype of truly affordable housing in the United States’ – and that placement of this piece in the hands of politicians and regulators, especially HUD, motivates them to buy into and support this reality as well!
So, make it a point to read the August issue of the Allen Letter professional journal.
A New Book: ‘The First 20 Years;
Forging Manufactured Home Community Advocacy & Networking’
The title of this Part III of this week’s blog posting at the community-investor.com website is the ‘working title’ of the book Bruce Savage, CAE., is researching and writing this Summer, for printing and binding in time for distribution at the 22nd annual International Networking Roundtable, 18 – 20 September 2013, in Bloomingdale, IL. Sure hope YOU plan to be there, as we’re expecting more than 250 land lease lifestyle community owners/operators, and their preferred lenders, from throughout the U.S. and Canada. And like subscribing to the ‘Allen Letter professional journal’ in Part II above, simply phone the official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 to request an agenda and registration brochure.
So, what’s this new book about? YOU, if you’re an owner/operator of a LLLCommunity; more specifically though, it’s ‘a little bit of history’, beginning on 31 August 1993, when 19 of your peers met in Indianapolis, IN., to take control of their (our) collective destiny, where national advocacy, representation, communication, and networking is concerned. Yep; it was an exciting, albeit at times scary, beginning of what’s since become a 17 year ‘run’ for the National Communities Council division (‘NCC”) of the Manufactured Housing Institute, or MHI.
Not going to ‘tell the story here’, that’s what the book is for; but thought you’d like to learn how the manuscript is shaping up to date.
Bruce has been interviewing the 13 of 19 LLLCommunity ‘pioneers’ still active in the realty asset class or recently retired. His outline to date covers some of what led up to the 8/31/1993 meeting (Hint. REIT ‘wave’ began in 1994, less than a year following said meeting in IN.), the series of ‘around the U.S.’ meetings that occurred during the next couple years, and how the NCC was birthed 1 January 1996, under the executive guidance of Jim Ayotte (now executive director of Florida’s MHAssociation). And, as you’d expect, there’s a summary of projects, etc., undertaken by the NCC during it’s 1 ½ decades of existence.
Some of you have asked why I didn’t make this book number 12 in my career. Well, it’s fairly simple reasoning. I ‘was present at the birth’ on 31 August, and since 1988, with the publication of ‘Mobile Home Park Management’, since retitled with release of the 6th edition, as ‘Land Lease Community Management’ have authored every other book ‘still in print’ about our industry and realty asset class. It’s time for someone else to shoulder the responsibility of being the ‘scribe of manufactured housing’. My hope, at PMN Publishing, is this historical retrospective by Bruce Savage, will serve as his entrepreneurial debut to this end. I know I’m excited about getting to read the final product; I hope you are too. And know what? Every attendee at this year’s 22nd annual Networking Roundtable will receive a FREE copy of it. Just one more good reason for YOU to be present at this major annual gathering of LLLCommunity owners/operators.
In the meantime; Bruce is recruiting and working for MHIndustry clients with a need for his print and online communication expertise. If you’d like to get in touch with him directly, simply phone (202) 664-4512. He’s also listed in the 14th annual ‘Who Ya Gonna Call in 2013?’ list of MHIndustry & LLLCommunity Freelance Consultants. If you’d like a FREE copy of this directory of 40 national consultants, ask for it when you subscribe to the newsletter and request a Networking Roundtable brochure.
From Blog Floggers (readers)….
Two this time around. The first from an old timer in our business, the second from an up and coming young executive in one of the largest fee management firms in the U.S. today.
“Yes, dysfunction seems to reign in Washington, and in some state associations as well. Here we are (manufactured housing), the best buy, period; and we ignore our potential, instead focusing on a desperate attempt to survive? What that Abbott & Costello could grasp ___ & _____, and our suppliers, manufacturers, servicers, and financiers playing with our (business) lives, all separately. And to boot,, we let our interest and need for (land lease lifestyle) communities disappear in a fog of being ignoramuses.” NB (Edited for effect. GFA)
“Inspiration can be achieved with a change in public opinion, but not necessarily among those in control. Response to this (article) description of our community, and what we’re doing, has temporarily shut down our incoming phone lines. Imagine that in a (land lease lifestyle) community! Promotion (of this concept) to government officials, must inform them about our unique brand of senior communities, i.e. branding to 55+ Baby Boomers, now turning into Seniors. Our company is moving out of traditional complacency!” SL (Edited for effect. GFA)
George Allen, CPM & MHM
Box # 47024, Indianapolis, IN. 462437