MH on the Comeback Trail?

According to The Wall Street Journal, the manufactured housing industry may be poised for a rebound. Noting the 42.1 percent increase in MH sales Jan. 2012 over Jan. 2011, and the corresponding six percent decrease of new single-family stick built homes in 2011, the article says home buyers may be looking for a more affordable alternative. During the late 1990’s and early 2000’s, loose lending standards led to many manufactured homes being repossessed, leaving a glut of used homes on the market and less demand for new product. Additionally, the lure of cheap credit lured many of modest means to traditional homes, causing the output of new MH to drop from 373,000 units in 1998 to 49,800 in 2009. The article says, “The three manufactured-home real-estate investment trusts tracked by Dow Jones All Equity REIT Index posted a total return of 20.5% in 2011. By comparison, the Dow Jones US Home Construction Index fell 3.9%.” Another draw is the cost: The average price of a manufactured home is $64,000 compared to $264,900 for a stick-built home. Although the public perception of manufactured housing is often rooted in the “trailer park” mentality of days gone by, strict building standards instituted by HUD in 1976 have upgraded the construction of factory-built homes. Sam Landy, president of UMH Properties, which has learned owns 9,000 homesites in the U.S., says manufactured homes are constructed as well as or better than stick-built. “”Our houses can go down the highway at 60 miles per hour and nothing happens to them,” he says.

(Photo credit: WSJ/UMH Properties)

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