Manufactured Housing Leaders Optimistic on State of the Industry
Arlington, VA – August 3, 2011 – (RealEstateRama) — As the United States continues to deal with a still-struggling economy, it might be easy to assume that all of the housing industry is part of the same scenario. However, industry leaders such as Thayer Long, president and CEO of the Manufactured Housing Institute (MHI), believe manufactured housing is a key economic solution for present and future home buyers.
The number of manufactured homes sold in the US has declined by 57% during the last five years. While the economic and housing crisis has slowed the pace of new manufactured home construction, Long emphasizes that the manufactured homes decline is well below the site-built homes’ segment, which has seen a much larger decline.
“The pace of new single family site-built homes sold in the US has declined by 76% since its peak in March 2005. Buyers purchased 322,000 new site-built homes in 2010, the fewest annual total on record going back 47 years,” Long said, pointing out the state of the manufactured housing industry has a much different story to tell with market share on the rise.
Over the past five years, excesses in the site-built housing market contributed to one of the greatest economic disasters in generations. Buyers assumed more debt and more house than they could afford, and this behavior was supported by the marketplace.
“Manufactured housing, having undergone its own subprime bubble over a decade ago, learned these lessons well,” Long said. “Manufactured housing is the best housing value proposition in the marketplace, a feat accomplished in spite of tougher self-imposed industry lending standards. Over 19 millions Americans live in a manufactured home, and the market share of manufactured housing is back on the rise over the past two years, with shipments increasing in 3 of the past 4 quarters.”
Joe Stegmayer, chairman and CEO of Cavco Industries, Inc., believes cost will be a primary factor of why manufactured homes will provide home value for the future.
“Manufactured homes offer quality housing at costs from 10 to 35 percent less than site-built construction,” said Stegmayer, who serves as chairman of the Manufactured Housing Institute. “As people continue to see utility costs rise with inflation, they will appreciate the cost savings achievable with energy-efficient manufactured homes.”
Cavco Industries, Inc., headquartered in Phoenix, Arizona, is one of the largest producers of HUD code manufactured homes in the United States, based on reported wholesale shipments of its brands Cavco Homes, Palm Harbor Homes and Fleetwood Homes. The company is also a leading producer of park model homes and vacation cabins in the United States. “Many people have come to realize that they don’t need or want large ‘McMansions’ that are expensive to buy and costly to maintain.
Consumers may want to invest less in a home and, as a result, have greater disposable income for other pursuits and interests,” said Stegmayer. Phyllis Knight, Executive Vice President and Chief Financial Officer of Champion Home Builders, Inc., also emphasized how important value is for home buyers now.
“In today’s economy, buyers are very value conscious. Also, lenders are very strict in qualifying borrowers for loans relative to years past,” Knight said. “Manufactured housing presents buyers the opportunity to buy at lower price points that make sense in connection with lower to mid-range income levels. At the same time, manufactured homes offer nice amenities and high quality construction.”
Troy, Michigan-based Champion Enterprises Holdings, LLC is a leader in factory-built construction which through its operating subsidiaries manufactures products at 27 facilities in North America and the United Kingdom and distributes its products through independent retailers, builders and developers. The Champion family of builders produces manufactured and modular homes, as well as modular buildings for government and commercial applications.
Stegmayer said that a key to success for the manufactured housing industry is to work closely with its regulator, HUD, to more effectively communicate the many features and benefits of factory construction, high quality, efficient cost controls and environmentally beneficial over site construction.
“In short, our industry needs to become better known to consumers of all kinds, particularly those seeking an affordable alternative to renting,” Stegmayer said.
As Long presents the facts of the manufactured housing industry, he reminds those to whom he speaks about the American dream of owning a home. “Americans can realize the dream of owning their home at an affordable price, without sacrificing quality or the level of amenities they desire,” he said. “The manufactured housing industry is very much alive, and very much here to stay.”
Knight said there is no one key to success for a company like Champion or for the manufactured home industry.
“We can’t create demand, but we need to be positioned to meet the demand that is there and to increase our share of the total new home market,” Knight said.
The Manufactured Housing Institute is the national trade association for manufactured and modular housing industries, representing all segments of the industries before Congress and the Federal government. From its Washington, D.C. area headquarters, MHI actively works to promote fair laws and regulation for all MHI members and the industry. For more information on MHI, visit www.manufacturedhousing.org.