What to Expect During Year 2018
Blog # 471; Copyright, 26 November 2017; at community-investor.com
Perspective. ‘Land lease communities, previously manufactured home communities, & mobile home parks’, comprise the real estate component of manufactured housing.’
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What to Expect During Year 2018
Watch for Four Major Occurrences to Materialize During 2018
Let’s begin with what likely won’t change during 2018, and for awhile beyond. First and most enduring, is the manufactured housing industry shipment volume shattering paradigm shift, in plat since the turn of the Century – when easy access to chattel capital, via independent, third party personal property finance firms went away and has stayed away for 17 years! Since the MHIndustry’s new home shipment nadir of only 49,789 new homes shipped during 2009, has not yet ‘doubled’ to 100,000 (i.e. only 81,136 during 2016), we have a long way to go to reach the industry’s ‘sweet spot’ of an estimated 200,000 new manufactured homes to be shipped per year.*1
Two somewhat related but different unchanging consolidation trends include:
1) Continuing consolidation of stand alone land lease communities, a.k.a. manufactured home communities, into property portfolios (e.g. only 25 such portfolios in 1977; 500+/-, 40 years later, in 2017). And 2) Continuing consolidation of HUD-Code housing manufacturers into mega firms, i.e. ‘Big Three C’ firms, Clayton, Champion & Cavco, today boast upwards of 70 percent national market share of new HUD-Code homes fabricated and shipped nationwide.
OK, now brief descriptions of four non-prioritized significant and expected occurrences during year 2018.
First. Watch for a ‘new class’ of HUD-Code manufactured home to materialize during the months ahead. First described at the manufacturers’ division session at MHI’s annual meeting in Orlando, FL., during October 2017, the first public description of this ‘new class’ will occur at 8AM, the first morning (16 January 2018) of the Louisville MHShow, when Chris Fisher (Ducker Worldwide) and Richard Jennison (MHI) hold forth on the subject. What to expect? As described in an earlier blog posting (See # 465) here, this ‘new class’ will be built in accords with the existing HUD-Code, feature 5/12 roof pitch with asphalt shingles, mounted on a permanent foundation, have a built-in porch, and likely a garage or carport at one end of the home. It’s doubtful the ‘new class’ will be referred to specifically as a ‘manufactured home’, but a moniker of its’ own, e.g. Millennial Housing, or some other such handle.
Second. Watch for the affordable housing crowd (a.k.a. low cost housing folk) to soon ‘discover’ factory-built housing and land lease communities, as practical,’ affordable housing & lifestyle’ solutions to this nation’s Affordable Housing Crisis (i.e. Majority of renters & homebuyers now pay in excess of 40 percent, sometimes 50 percent, of their annual gross income for housing)! How’s this word getting out? A White Paper has been ‘making the rounds’ and been generally well-received to date: ‘Solving Our Nation’s (Lack of) Affordable Housing Crisis, with Factory-built Housing & Land Lease Communities’! Researched, produced and distributed by the Community Owners (7 Part) Business Alliance (‘COBA7’). How to obtain a copy of the White Paper? simply request it via Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.
Third. Watch for a major overt effort to organize, recruit and launch a new, independent, third party national advocacy entity, comprised of businessmen and women from most, if not all, post-production segments of the manufactured housing industry. While this non-manufacturer initiative has been quietly discussed for some time, the question remains as to whether discontent with the status quo is strong enough to spawn a third manufactured housing presence in Washington, DC. – a ‘fourth presence’ when one includes the Community Owners (7 Part) Business Alliance, or COBA7. To be put in touch with those organizing this effort, phone (317) 346-7156 for contact information.
Fourth. HUD-Code housing manufacturers have realized since 2009 (also the year Community Series Home debuted) how land lease communities are the new primary market for new manufactured homes! After all, in 2009, only 24 percent of the 48,789 new homes went directly into land lease communities. However, by year end 2015, that volume jumped to 40 percent of the 70,544 new homes shipped! And it’s likely the percentage now exceeds 50 percent. But there’s a troubling, but potentially rewarding, challenge afoot. While the largest property portfolio ‘players’ have learned, and now routinely effect the ‘new home purchase, sell on-site, & seller-finance the transaction drill’ – well, the vast majority (estimated at 80 percent of 50,00+/- LLCommunities nationwide) of these property owners/operators know they have a growing number of vacant rental homesites, have little to no idea how to ‘solve’ it by buying, selling, and seller-financing new homes on-site! That, in this veteran industry observer’s opinion, remains ‘the challenge’ of 2018, albeit, How to reverse said trend and restore prosperity! Want to address this? Plan to participate in the second Two Days of Plant Tours & Home Sales Seminars, at the RV/MH Hall of Fame, in Elkhart, IN., during May 2018. To get onto the ‘invite list’, phone the IMHA/RVIC in IN. via (317) 247-6258 X 11. Don’t wait.
Well, there you have it. What to watch for during year 2018. The ‘new class’ of manufactured home, our brand of affordable housing & lifestyle to mount the national stage, maybe a new post-production national advocacy entity in Washington, DC., and the education of small to mid-sized land lease community owners/operators nationwide.
1. Relative to manufactured housing annual shipment totals quoted in this blog posting, know they are 12 month totals researched and published by the Institute for Building Technology & Safety (‘IBTS’) at the behest of HUD; then parroted, in unadulterated fashion, by MHARR and COBA7. These are the manufactured housing industry’s official annual new home shipment totals!
George Allen , CPM * MHM