The manufactured housing industry has been in what pure data indicates could be described as a prolonged Bearish Market type trend. The Manufactured Housing Institute (MHI) has quietly stopped issuing monthly “economic reports” like the one shown here, but has nevertheless continued to provide certain annual snapshots for those who know how to navigate their sometimes labyrinthine site to find it. MHProNews is exposing and examining that MHI national, regional, and state level data, as part of a broader move that this analysis and others aim to expose what should be their obvious failures that contradict years of the manufactured housing trade organization’s boastful claims. By publicly challenging MHI and what MHI award-winner and success story Marty Lavin has described as their “Big Boy” corporate masters, there is likely to be opportunities to break that bearish trend and/or break the “chains of habits” that an insight from Berkshire Hathaway (BRK) Chairman Warren Buffett cited further below indicate have allowed it to form in the first place.
Last night’s market report – linked below – produced an initial analysis of the MHI generated compilation of national data graphic that is shown following that linked report. Note that MHI cites their sources for this data as the “Institute for Building Technology and Safety” (IBTS), which collects that data for the U.S. Department of Housing and Urban Development (HUD). They also cite the U.S. Department of Commerce, and the U.S. Census Bureau. Meaning the data MHI presents are all publicly paid for by taxpayers from available federal information sources that someone working for MHI plugged into a form. It is hardly proprietary information in the normal sense. This is data gathering as opposed to original research. That is meaningful for several reason that may be explored in a future MHProNews report.
Some data points from the various federal sources cited above bears a closer look.
1998 was the last high-water year for manufactured home shipments. Per the MHI document that cites federal sources is the following.
|Year||New Manufactured Home (MH) Shipments||New, Single
Site Built Homes
|New MH as % of New Single Family Homes Sold|
A source with access to the federal data MHProNews was asked to review the year 2001 data above cited by MHI. That source said the following. “139,229 is 15.45% of 901,000.” “More significantly, [the correct] production number for [HUD Code manufactured homes in] 2001 is 193,120.”
- *) This MHI stat is in error, per a federal source. MHProNews is awaiting confirmation from a second federal source that has confirmed our request. A follow up is pending.
- **) Simple mathematics (division) reflects that these claims by MHI are all in error. See the analysis that follows.
That source and the federal data claim appears to be quite so.
MHProNews has asked a different official in the federal government to provide relevant data to cross check other MHI claims in their report. To be clear, there are data points that MHI uses that are accurate or close to accurate. But then there are other ‘facts’ that MHI has presented as industry data that are demonstrably incorrect. The example above cited by that official are not unique.
Using MHI’s data shown above:
- for 1998, new manufactured homes divided by single family ‘site built’ home sales are as follows: 372843/885000 = 42.1%, not the 29.60% they reported.
- For 1999 HUD Code manufactured home shipments divided by single family housing units sold are as follows: 348671/906000= 38.48%, not the 27.8% MHI reported.
- For 2000, new manufactured housing units divided by single family conventional (site built) home sales are as follows: 250550/877000 = 28.57%.
- For 2001, using corrected data that fixes MHI’s reporting error, as our source reported as shown above, manufactured homes divided by SF site built homes should be as follows: 193120/901,000 = 21.43%.
- 2002 data, the year that Berkshire Hathaway acquired Oakwood manufactured housing and their related lending, the following manufactured homes vs. site built housing data should apply: 168491/972000 = 17.33%.
There are a raft of apparent errors that are found in this one MHI “Manufactured Home Shipments versus Single-Family, Site Built Housing Starts and Homes Sold (1980 – 2020).” At a minimum, it should be an embarrassment to MHI and their corporate board member ‘leaders.’ Can’t they even do simply math?
Jumping ahead to the 2020 column, MHI reported 94,401 new HUD Code manufactured homes shipped that year vs. 810,000 new single family conventional housing units sold. That would be 94401/810000= 11.65%, not the 10.4% they show.
Perhaps some of this could be explained as accidental. Say, for example, data input errors. But that still begs these questions.
- Does no one actually check MHI’s claims – at MHI – before they are published and posted to the public?
- Why is it that after MHProNews publishes a fact check that MHI still leaves the information uncorrected on their own website?
- New and longtime readers alike are reminded that when MHProNews began scrutinizing MHI claims and reports, MHI hired an outside attorney to monitor our websites. Who said? That outside attorney to MHProNews. Initially, MHI/their outside counsel attempted to stop MHProNews from publishing such fact-checks and analysis of their reporting and data claims. Why? Isn’t that in itself a red flag that suggests that they have something to hide?
By obscuring, misreporting, and hiding data, MHI is arguably part of the “moat” of Warren Buffett-led Berkshire Hathaway and their “big boy” allies at that trade association. How so?
By contrast to MHI, the Manufactured Housing Association for Regulatory Reform (MHARR) strives to meticulously provide dependable data that is easily found from the home page of their website. The most recent MHProNews analysis of MHARR provided data, also based on federal sources, is linked below.
Bearish trends are logically a barrier for interest in an any given industry by perspective competitors often comes down to how appealing a sector looks. When manufactured housing looks like a relatively unappealing sector, is it any surprise that so few enter the field? That goes back to a basic principles of economics, business, and investing. There are real or perceived:
- barriers of entry,
- barriers of persistence,
- barriers of exit,
for any actual or potential business venture.
All of this circles back to apparent tools for moat-builders in manufactured housing.
There are loyal, habitual, and blind followers in any human endeavor of sufficient size to merit attention that one cares to mention. One problem with habitual followers is that they may not step back and see if their habit is still serving their original intention of joining or following a particular organization or group. This is a reality that Berkshire Hathaway Chairman Warren Buffett understands well. One of Buffett’s insightful quips is that the chains of habit can seem light until they are too hard to break.
Traditional morality and religious disciplines shed a light on the notion of the value of honesty and accuracy. Dating back to the time of the Temple in Jerusalem, unjust weights and measures or units of exchange were ripped by Jesus (see Matthew 21:12, Mark 11:15, Luke 19:45, John 2:13-16). Note that all four gospels covered this incident in the life of Jesus Christ. That is not true of several other things in the New Testament Gospels. While to a believer all that is Scripture is significant, the fact that all four Gospel writers mention that incident suggests that the topic is a serious one. Some commentaries on Malachi 3:1,2 suggest that this incident of Jesus cleansing the Temple of dishonest money changers was one of the “Old Testament” or prophetic Hebrew Scriptures references that was fulfilled in the person of Jesus.
Honesty and accuracy are not only religious traits, they are secular business points too. That is why – for instance – auditing firms exist.
MHI has certain items audited. Are those auditors to be questioned about their apparently missing or ignoring information that is revealed in reports like this or the one below?
MHProNews has long had the tag line: Manufactured Home “Industry News, Tips, and Views Pros Can Use.” © That is prominently shown under the logo at the top left of virtually every page on our website.
It seems apparent that years of MHProNews reports have born out. The fact that MHI hired an attorney, and used other inside and outside counsels in attempts to deter or change MHProNews reports are arguably ‘over the target’ reactions.
As MHProNews revealed in our ‘read-hot’ (pun/play on words intended) SWOT report, in our expert estimation, it makes no sense for independents to feed the hands that bites their own interests.
The clear case has been and can be made that manufactured housing has been subverted from within.
The evidence-based reasons for independent producers who are not already engaged with MHARR to get engaged are only growing. In an affordable housing crisis, not only is manufactured housing now in its third year-over year of declining sales, they can not or will not get something as simple as industry data corrected. The old saying arguably apples, “Fool me once, shame on you. Fool me twice, shame on me.” For MHI, their years of history of ‘fooling’ independents are clear reasons not to trust them or support them. Do not be fooled.
Last point for this report. Independent retailers, communities, and suppliers should be establishing their own post-production trade group. See the recent MHProNews report linked here and the prior one from MHARR linked below.
Bearish trends in our industry will only change when the status quo is challenged repeatedly and successfully.
Stay tuned for more of what is ‘behind the curtains’ as well as what is obvious and in your face reports. It is all here, at the runaway largest and most-read source for authentic manufactured home “Industry News, Tips, and Views Pros Can Use” © where “We Provide, You Decide.” © ## (Affordable housing, manufactured homes, reports, fact-checks, analysis, and commentary. Third-party images or content are provided under fair use guidelines for media.) (See Related Reports, further below. Text/image boxes often are hot-linked to other reports that can be access by clicking on them.)
By L.A. “Tony” Kovach – for MHProNews.com.
Tony earned a journalism scholarship and earned numerous awards in history and in manufactured housing.
For example, he earned the prestigious Lottinville Award in history from the University of Oklahoma, where he studied history and business management. He’s a managing member and co-founder of LifeStyle Factory Homes, LLC, the parent company to MHProNews, and MHLivingNews.com.
This article reflects the LLC’s and/or the writer’s position, and may or may not reflect the views of sponsors or supporters.
Connect on LinkedIn: http://www.linkedin.com/in/latonykovach
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