MHMSM.com presents Factory Built Housing Industry News at Noon with Erin Patla.
We begin with these stories:
A REPORT ON BLOOMBERG.COM Monday noted that while housing has led the U.S. out of seven of the past eight recessions, this time it could lead it back into recession. “If foreclosures continue to mount and depress home prices, that could send the economy back into a recession,” Celia Chen, an economist who tracks the industry for Moody’s Analytics Inc told Bloomberg. She emphasized, “The housing market and the broader economy are closely intertwined.” Also noted, an upcoming report by the Chicago-based National Association of Realtors will show that July sales of existing homes plummeted 12.9 percent from June, the biggest monthly loss of 2010.
ACCORDING TO THE NEW YORK TIMES, the days of the house as a “nest egg” may be gone for good. Once powering the economy and paying for retirement and education, that “nest egg” can no longer be counted on or expected. Dean Baker, co-director of the Center for Economic and Policy Research, estimates that it will take 20 years to recoup the $6 trillion of housing wealth that has been lost since 2005. Some markets like Arizona may take longer. After adjusting for inflation, values will never catch up. “People shouldn’t look at a home as a way to make money, because it won’t,” Mr. Baker told the newspaper. As the article points out, the short-term may be worse and represent additional losses.
THE MANUFACTURED HOUSING ASSOCIATION for Regulatory Reform notes in response to a Congressional request, that the group submitted a point-by-point response refuting HUD’s core arguments on each issue addressed and also highlighted factual errors and incorrect assumptions underlying various HUD positions – such as those pertaining to the crucial role and authority of the Manufactured Housing Consensus Committee. However MHARR says HUD is publicizing assertions made in the June letter without indicating they have been refuted. As a measure of balance, MHARR has sent out both the original letter and the July 22 response. The documents are available at mhmsm.com/10/426.
Manufactured Housing in the News…
THE GAINSVILLE TIMES reported last week that Georgia Senate Bill 384, which takes effect next month, will put a stop to cities and counties refusing to accept pre-owned manufactured homes into their borders based on age. Currently in Hall County, a manufactured home more than seven years old must not only be inspected by the building maintenance department but also requires approval from the Hall County Planning Commission and Board of Commissioners before it can enter the county.
A RECENT PRESS RELEASE issued by MHMSM.com was posted on the online pages of several major newspapers including the Philadelphia Inquirer, Dallas Morning News and the Orange County Register. The release titled Support Urged for Bill Aimed at Replacing of Older Manufactured Homes urges Congress to help the replacement of some two million older mobile homes in the country by passing a bill that would provide rebates of $7,500 for the purchasers of Energy Star-qualified manufactured homes. Proponents say there are important safety benefits to newer homes and significant energy benefits.
MORE ON THE FUTURE OF HOUSING: George Casey writes in Builder that since the end of World War II, the home ownership rate has climbed from well under 50 percent to nearly 70 percent at the peak of the housing boom. It now stands in the mid-60-percent range and continues to retract. Also in that period, multifamily numbers went from 29 percent to 18 percent and manufactured housing went from 18 percent to 8 percent. Now, Casey writes, “the core underpinnings of the policies that led to a vibrant housing industry over most of our lifetimes are beginning to crumble;” he also points out that a decimated industry cannot generate the dollars needed for Washington lobbying. In the future, he says, expect housing policy to focus on low-income apartment rental subsidy programs and less on helping middle and upper class homeowners. What impact the market and government policy shakeouts will have on the manufactured housing industry remains one of the many unknowns.
IT’S BEEN THERE FOR A WHILE, but MHMSM.com Publisher Tony Kovach has pointed out the elephant in the room in his latest Masthead blog post. That elephant is the challenges that lenders and home owners face when resale time comes. Several lenders contend that when they take in a repossession, they wholesale that repo 65 percent of the time. Kovach says higher rates on manufactured homes than conventional housing are one consequence, and less lending availability is another avoidable consequence. Read more about the problem analysis and solution at mhmarketingsalesmanagement.com/blogs/tonykovach/
“Up next, MARKET NEWS”
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In Market News…
PATRICK INDUSTRIES announced Monday that it has completed the previously announced acquisition of certain assets of Bristol, Indiana-based Blazon International Group (“Blazon”), a distributor of various wiring, electrical, lighting, plumbing and other building products to the RV and MH industries, at a purchase price of approximately $3.7 million.
MARKETS MOVED LOWER Monday with the manufactured housing composite value losing more than two percent. Stocks with considerable activity Monday include Skyline Corp, down more than five percent, Palm Harbor Homes, down nearly three percent and Deer Valley Corp, down nearly two and a half percent. Cavco managed to end up modestly for the day. The Dow Jones industrial average had been in positive territory, but closed down 39 points or point 38 percent.
“On behalf of Production and IT Manager Bob Stovall, Editor L.A. ‘Tony’ Kovach, Associate Editor Catherine Frenzel, INdustry in Focus reporter Eric Miller, and the entire MHMSM.com writing and support team, this is Erin Patla. G’day!”