The Census Bureau revealed today the latest sales figures for manufactured homes, which were up 0% from the previous month. Boring. But the trend over the past 65 years is kind of fascinating:
Mobile home sales surged in the '60s and then collapsed utterly in the space of two years from 1973-74. What the hell happened? In any case, sales puttered along for a couple of decades and then, again, completely collapsed over the space of two years from 1999-2000.
That's a helluva market to be part of. There's got to something that caused the two collapses, but I can't think of what they could be.
POSTSCRIPT: A detailed discussion is here, but it doesn't really come to any conclusions. Sales of new homes in general dropped across the board in 1973, but not by nearly as much as mobile homes—and they recovered pretty quickly. It's a mystery.
I'm a couple of years older than our host and when I was much younger, i.e., the 1960s and 1970s, I thought mobile homes were meant to be towed behind a car for a vacation (only to be displaced for this purpose by RVs: see this wikipedia entry). If that is indeed what was meant by a mobile home back then the substantial decline in 1973-4 would have been due to the first oil shock. Recall, however, that that was due to the Yom Kippur war, which occurred in October 1973, so would not explain any decline in the first 3 quarters of 1973.
There does seem to be some confusion. Travel trailers, motor homes, and mobile homes are three very different types of "vehicles".
Mobile homes are built in factories and hauled to their sites. They are a type of modular housing, not vehicles.
I'm in the same demographic. I grew up in the south, where trailer parks were common. Mobile homes were taxed at a lower rate. Putting a mobile home up on blocks was common, but as long as they *could* be mobile in theory, they qualified.
I'm going with: it became less profitable, relatively, to construct manufactured homes than on-site framing.
Probably has something to do with how housing asset prices have been skyrocketing... which incentivizes building the largest, most expensive (and therefore most profitable) home that you possibly can on a given parcel. Mobile/manufactured homes are decidedly not that.
Capital's gonna go where the returns are.
Mobile homes (manufactured) suffered from terrible construction practices and got a very bad name in the early 70's. The Mobile Home Construction and Safety Standards Act of 1974 started improving the quality.
Today, manufactured homes are largely the province of retirement communities and low income areas because their appreciation is so bad. Younger folks would rather buy homes that appreciate and a lot of the existing manfufactured stock is in terrible shape. In places like Southern California, those manufactured homes are literally the only affordable housing. You can buy a 3/2 in Santa Ana for around $200k - but you still have to pay space rent of around $2k per month.
The pros are that you own the walls and there are no shared walls. Space rent can go up, but not like rents in apartments.
There are pros and cons, but since everyone is now fully bought into the idea of house an investment, manufactured is overlooked because it's not a great investment. It's a place to live.
I'll also add that some of the newer manufactured units are nicer than stick build homes.
"because their appreciation is so bad."
Do mobile homes ever appreciate in value?
“You can buy a 3/2 in Santa Ana for around $200k…”
If this is true, then the answer must be yes, because nobody in the 1970s was buying a mobile home for $200k. In fact nobody in the 2000s was buying a mobile home for $200k.
I thought he meant a new home, but apparently no. However, those homes do not look like they have moved in dozens of years. They are on permanent foundations with carports, patios, etc.
Where I live, mobile homes depreciate in value. Used mobile homes are, well, not in demand. Unless you line the inside with aluminum foil to keep Tha Guvmint from watching you
Houses in general don't appreciate, they depreciate as they get older and develop problems. It's the *land* under the house that appreciates, and is the part of real estate that creates investment value.
Good points. Actually, allowing/encouraging more manufactured/mobile home developments could solve the housing shortage in a lot of places, but there's a terrible stigma attached to them and more and most municipalities just don't allow them any longer.
That is one of the big issues. Nearly sixty years ago, a mobile home factory opened in my home town. At that time one of the selling features was that they would be a great thing for people whose occupations required them to move frequently. The idea was that instead of having to pack your things, give notice to your landlord or sell your house, find a new house in your new location, and unpack, you could just call a tow vehicle and have your house moved to your new town (of course, everybody knew it wasn't going to be quite that simple, but that was the idea).
That has never even begun to work because there have never been enough mobile home parks and so there is almost never a vacancy in the place a person wants to move to. Most mobile homes are moved once; they're bought new, moved into a mobile home park, and then become immobile until they're scrapped.
The biggest downside is you own the unit, but not the land it's on. When some developer buys the trailer park to put up apartments you are shit out of luck.
Exactly, that's why you don't get the same appreciation -- you don't own the land. Space lease can vary tremendously depending on amenities. The nicer parks have clubhouses and pools, almost like little resorts. The 55+ communities can be really nice and everyone owns golf carts.
We've suggested to the kids that they consider manufactured since they'll never be able to buy in SoCal, they wrinkle up their noses and go "eww" at the idea, then turn around rag on the boomers who bought up all the nice houses. Sigh.
Hubby and I have considered (and continue to consider) just buying a piece of land and plopping one of the nice manufactured models down on it. $300k buys you a really, really nice prefab.
The first decline: the development of building codes specific for manufactured housing; the culmination of the formaldehyde problems.
The second decline: the rise of PE investment into mobile/manufactured home parks; the closure and redevelopment of said parks for higher returns.
The slow rise: shift of mobile/manufactured homes to turnkey ADUs and tiny houses.
There are also fewer mortgage companies that will finance them and the ones that do often charge a higher rate for them.
For the second drop at the turn of the century, isn't that about the time lower interest rates kicked in causing a shift away from mobile homes?
Xenia Ohio tornado was in April 74. Idk if that was the reason mobile homes fell out of favor. I do remember it was a huge thing.
That's a good point, too. They took a one-two-three punch then.
The fact that you basically have no new parks opening has capped it since.
This study also cites recessions in the 70s as stalling shipments
https://www.jchs.harvard.edu/sites/default/files/research/files/harvard_jchs_pew_report_1_updated_0.pdf
Matt Yglesias explains what happened here: https://www.slowboring.com/p/how-to-unleash-a-trailer-home-boom
Basically, bad regulation was the culprit.