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INTRODUCTION
The manufactured housing industry is unique in that it is a combination of individual home ownership and home site rental. The portion of the industry most relevant to the appraisal of the subject properties are the home site rental, as the interest typically appraised is the interest held by the community owner. The other portion (home ownership) is also relevant because the rental of the site is dependent on a potential tenant’s ability to place a home on it. So while the value of the homes is not directly considered in the analysis, the ability of potential tenants to place homes on the sites is considered in the analysis. An in depth discussion of manufactured housing construction, sales, ownership and financing is presented below.
Manufactured Housing History
The evolution of the manufactured housing community (MHC) began in the 1920s, when the first camping trailer was built in Michigan. Camping trailers adapted to other uses such as short term, transportable housing.
The need for short term housing, on-base housing during World War II resulted in the creation of house trailers. House trailers were the next generation of camping trailers. Post World War II, the need for short term, off-base housing emerged, due in part to large construction projects (dams, highways, pipelines, energy facilities) in undeveloped areas. House trailers were ideal for this type of housing. Post construction, the trailers could move to the next location. The trailers were expanded, refined, and improved, and became mobile homes in the 1960s. Mobile home parks were developments in which mobile homes were placed.
The phrase manufactured home came into being in the mid-1970s with the passage and enactment of the National Manufactured Housing Construction and Safety Standards Act, commonly known as the HUD Code. This act, and these standards, went into effect on June 15, 1976. The Act required that factory built homes be built in accordance with the HUD Code. (Factory built homes built after this date, constructed in accordance with a code other than the HUD Code, are known as modular homes.) Due to enactment of these standards, there has not been a mobile home built in the United States since June 15, 1976. Finally, on October 8, 1990, Congress enacted Public Law 96-399, officially changing the phrase “mobile home” to “manufactured home”.
Improvements in the public perception of manufactured housing makes the manufactured homes more attractive to people who otherwise would not have considered it. Along with stricter building codes, the manufactured housing industry has been successful in banishing false concepts regarding construction of manufactured housing. Historically, manufactured homes had the reputation of being unsafe, as they were thought to be more prone to fire and wind than conventional housing. However, studies have shown that site built homes are more likely to experience a fire.
MOBILE HOME PARK INDUSTRY
Manufactured homes continue to be a crucial solution to the affordable housing crisis, filling the gap in the middle housing market for many customer segments. Judging by the numbers from our 2024 “State of the Industry” report on manufactured housing industry trends and statistics, manufactured housing industry continues to show positive signs for growth.
Competitive Advantage
What is the cost for a new manufactured home?
The average cost for a new manufactured home in 2023 was $113,951.97. For a multi-section home the average cost was $193,103 and the price for a new single-section home averaged $106,629. For an existing manufactured home the average sale price in 2023 was $69,781.
What is the cost per square foot for manufactured homes?
The average cost per square foot for a manufactured home is $130.53. For a multi-section home the price per square foot averages $140.07 and the price per square foot of a single-section home averages $110.17.
Community Living
How many manufactured homes are there, and how many go to communities?
There are an estimated 4.3 million manufactured home sites in the United States. Approximately 57 percent of new manufactured homes are placed in a community. The U.S. has approximately 43,000 manufactured home communities. More than a third of the country’s known communities were constructed in the 1950s through 1990s, 17.2 percent from 1950 through 1970 and 16.2 percent from 1971 to 1990.
Communities by Size
Approximately 29 percent of known communities are in a size category of 25 to 99 homesites. The next largest group is shared at 16 percent, with the communities that have one to 24 homesites and communities that have 100 to 299 homesites making up more than a third of the market. Three percent of the market is comprised of communities with between 300 and 499 homesites. One percent has between 500 and 999 homesites. Only 0.002 percent of communities have 1,000 homesites or more. An estimated 34 percent of communities in the U.S. are listed as “unknown” size.
How Many People Live in Manufactured and Mobile Homes?
MH Insider’s review of annual manufactured housing industry trends and statistics show 20.9 million people in the U.S. live in a manufactured or mobile home. Manufactured homes make up 8.6 percent of annual new home starts. About 73 percent of new manufactured homes are titled as personal property or “chattel”.
Resident Satisfaction
How much do residents and owners of manufactured homes appreciate their purchasing decision?
A recent study reveals 85 percent of people are satisfied with their mobile or manufactured home, a seven percent increase from the last survey conducted in 2018. Seventy percent of residents cite affordability as the key driver for choosing manufactured housing. Fifty-three percent of manufactured home owners said they purchased their home for its energy efficiency, and 49 percent choose their home for added space.
Manufactured Housing Production
How many manufactured homes were built during 2023?
Thirty-six U.S. manufactured home builders operating from 148 plants across the country produced 89,169 housing units during 2023. Shipment levels decreased slightly with rising interest rates in 2023 but home sales have been steady through the year, with the market exhibit signs of growth.
Credit: Manufactured Housing Industry Trends & Statistics: MH Insider (Updated May 2024)