Price of New Mobile Homes and Inflation

mobile home university
#1

Before Covid, we purchased new double wide homes from Fairmont for ~$50k in Indiana. After repeated surcharge increases, the price for the same home is now $85k, and I’m worried that this is going to price out many of our potential home buyers. And the wait time for new homes has gone from 3 months to 9+months.

Giving the ongoing inflation and supply shortages, I assume that this is an industry wide issue, but wanted to see what this group thinks. Are you seeing the same increase in home prices and wait times across the board? Or are some home manufacturers navigating the situation better than others?

Thanks,
John

1 Like
#2

Five years ago we paid 80K Canadian for a 16 X 68 Fairmont and the price is now about 170K. We target seniors/retirees and considering that conventional home prices up here have increased by 200-300K, during the pandemic, even at 170K it is a good time for them to sell and down size to a manufactured home.
With prices on the rise park owners will need to shift their target market to more affluent buyers. We have been very successful targeting mid to upper end middle class retirees for the past 12 years and completely turned our community around from lower income working class family to exclusively seniors.
On the other end, due to higher home prices, manufactured homes may be the answer for young working class couples (double income) to purchase their first home. It will depend on the quality of the communities and if community owners are willing to shift away from the old standard of parks being considered “affordable housing”.

2 Likes
#3

Great answer @Greg and completely agree. One of the reasons we are super picky about our markets (many times at the expense of growth)

#4

Our local market is completely void of new home purchases. Closest dealer sold all of their model homes and cant give good arrival times or firm price for orders. The small dealers are getting shut out. Seems like manufacturers could run 3 shifts in this very odd market and with the uncharted world events. [?] Stagnation I think they call it. Recession overdue unfortunately.

1 Like
#5

Maybe buy used. Depends on you park and market. From what I can see you can still find reasonable deals on used homes.

#6

Just be aware when you’re buying used you’re participating in the poaching of other Park owners and they could hit your Park soon. Flipper/poachers are actively posting here to HELP you out! Right.

1 Like
#7

Rising prices won’t necessarily hurt us. We’ve continued to buy new homes constantly over the last two years. What we’ve found is that as we’ve raised our rents to match price increases, our quality of tenant has improved, money down has gone up, and turnover is down. I’ve had several park owners who have been in the business 40+ years confirm that this always happens.

As for lead times, if you know a local dealer talk to them and see what they’re seeing. Rates and prices are rising and demand is softening here in NC. Our setup company works for several sales lots and offline dates are getting moved up by 1-3 months. The only way that happens is if orders are falling out. This has happened with fleetwood and champion customers. When things got crazy a lot of dealers were putting in ghost orders - ordering a home that hasn’t sold yet. If offline was 6 months away then they had 6 months to sell the home. Now they’re finding they aren’t selling all the ghost orders so houses are falling out of the queue. I doubt this is something unique to us here in NC.

Look at car dealerships: last summer they had no cars on the lot. Now they are back to normal inventory levels. We’re starting to see “0% financing” advertised again. Why finance at 0% if demand is so high?

3 Likes