Modular and Manufactured Housing

[jcestes4]

Sorry if this has been covered in the past but I have a serious question about modular and manufactured housing and would appreciate replies from anyone with experience.

I have a couple of clients who are involved in the modular housing industry. From what I have seen this is certainly not the same product that grandma lived in 30 years ago with the axles still attached. However, I realize that there is still a certain stigma to the concept of a house manufactured in a plant rather than built on site. It seems to me that the true measure of the quality of these houses is whether or not they appreciate in value as does most residential construction as opposed to depreciating in value as we have all seen with traditional manufactured housing or trailers if you will.

My question is this. Does anyone have experience with a modular or manufactured housing development in which the properties and improvements have appreciated in value in terms of both true market value and in assessed value for taxation?

I appologize if this seems to be a rather simplistic question but I think that the answer could have significant ramifications especially in terms of post-Katrina redevelopment efforts.

[GRDadof3]

Here's a report from HUD

http://www.huduser.org/publications/HOMEOW...dAlt4LIFam.html

but as far as manufactured housing in our area in Michigan, the only time I have seen them hold value was if they were on a rural lot with acreage, as opposed to in a "park".

As far as how they are constructed today vs. years ago, I worked at Foremost Insurance in Grand Rapids just out of college. Their specialty is insurance for mobile homes, manufactured homes and RV's. There is very specific underwriting criteria that insurance companies have that determine whether a home is a "manufactured" home or "site built". You may want to check with your State's insurance commission as well to see how it is defined. If a home has to go on a mobile home policy, then the value inherently follows.

[Snowguy716]

I have friends who are complaining because their property value has risen from $74,000 in 1999 to $110,000 in 2004.. a huge appreciation. They live in a modular home (it is constructed in pieces and then put together on site)... much faster and cheaper for people who want something relatively cheap but nice. So, the answer in this case, is yes!

[Spartan]

I have heard that modular homes are actualy of a higher quality than traditional stick-built homes becuase so much of the construction process is done in a controlled environemnt. I would assume this should translate tog higher home values. I've never been clear on whether modular homes are classified as 'mobile homes' or regular houses though.

[andrew.w]

I have heard that modular homes are actualy of a higher quality than traditional stick-built homes becuase so much of the construction process is done in a controlled environemnt. I would assume this should translate tog higher home values. I've never been clear on whether modular homes are classified as 'mobile homes' or regular houses though.

If by modular you mean the type were the house is created in one/two peices and not the type were the house is constructed in a warehouse then completely dismanteled and reconstructed at the home site, I can offer some experience:

I think the quality may depend on the company. I know the house we bought for a temporary home durring the construction of are permanent residense wasn't of good quality. But then I have seen some very nice examples of modular houseing.

[goodbye]

This is interesting! I had the pleasureable opportunity of visiting the best modular home factory in the nation a couple years ago. It was a brand new facility with the most up-to-date automation and building techniques available anywhere. A friend of mine is a real estate developer in the Upstate and uses this company for many of his customers' new homes. You can go and design any home you want with any number of different roof pitches you want - basically ANY home you want to build, they can do it. I was extremely impressed with the quality of their homes. Instead of using cheap nails from a nail gun (not very durable in most cases), they use 3-inch screws for studs, joists, rafters, etc. They also use up to 20-foot drywall panels, instead of the standard 4'x8' or 4'x12' used on most track and custom-built homes. Infact, I was told that they will give you $5.00 for every joint you can see on their walls! I couldn't find any, so no dough. Most homes would make me rich with that offer.

As building stadards go, modular homes from this place are far better than any typical stick-built home you'll find.

Mid-Atlantic Building Systems - Candor, NC

Manufactured homes (essentially mobile homes) are totally different than modular homes, though I believe designations and taxes vary between different states.

[rbdetsport]

Pulte Homes are manufactured. NASTY HOMES! LOWERS MY LAND VALUE, the fact that there building these across the street from my nice subdivision

[richb]

Modular homes in moble home parks in general will lose value. Why? You don't own the real estate under it!!! When you need to sell that home, a real estate agent cannot list it on MLS.

MLS (at least here in Indiana) you have to have real estate (land or interest in land) to list it on MLS. A real estate agent can list it as the house itself but since it cannot be listed on MLS only agents in the same firm will see the listing. Most homes are sold though MLS so fewer buyers will even see it. And most home buyers want to own the land as well. So if you can't sell it, you have to move it or sell it cheap to the moble home park.

If it is on rural property or on a subdivision lot it probably will increase in value because it is treated more like a regular house by the real estate industry.

[hood]

It all depend on the particular manufactured home, they could be anywhere from a trailer to a very nice home. I've seen pictures of manufactured homes with vaulted celings, 2.5 stories, and up to 6 or 8 pieces. Others are simply two unit houses that sont even use drywall or seperate roof trusses. I think that eventually most homes will be modular, its a far better and cheaper way to build a home when done right.

[goodbye]

Let it be known that Modular and Manufactured homes are completely different.

[dimebag1980]

Let it be known that Modular and Manufactured homes are completely different.

Good to see someone posted this, because I was just about to.

Manufactured homes have come a long way, but in most cases they still depreciate quickly (like most cars) and do carry with them the stigma of being "trailers." They are still built in plants and towed behind a truck to the jobsite, so why wouldn't one call them trailers? I know I still call them trailers. Typically these homes are built in their entirety in a factory and then pulled to the customer's property and plopped down. These days, some people even anchor these types of homes to the ground so they aren't tornado magnets. These types of homes are also typically built to a slightly lower standard than a regular site-built home. There are so many regulations these days about what manufactured homes must be composed of, but overall they're still not as nice as most site-built homes.

Modular homes, on the other hand, are homes which are assembled on site in pre-built sections. These homes are often built like a site-built home, but in a controlled environment and then taken to a jobsite where they are assembled, and often assembled better than manufactured homes. A manufactured home usually is already sheetrocked inside and then assembled, whereas a modular home is typically sheetrocked after it's assembled, creating a truly seamless house in the end.

Then there is a regular site-built home, which is often referred to as "stick-framed." This type of home will appreciate more rapidly for many reasons. One reason is that there is no stigma to the typical site-built home. You can watch it being built from the foundation up. You can even go inside and watch it being plumbed, wired, sheetrocked, and trimmed out. There is nothing left to the imagination since you can see everything first-hand.

From my own personal experience in this particular industry, I would say that site-built homes have the best image and appreciate the absolute most (considering they're taken care of,) followed by modular and then manufactured. A home is the best investment a person can make, so just as with the stock market, people should invest wisely.

An aside: the company I work for builds stick-framed homes, even though after nearly 60 years in business and millions of dollars spent on model parks with homes showcased in siding and brick, as well as being displayed with top-of-the line products, we still suffer from the "pre-fab" stigma. It gets to me still, but everytime someone asks me if they're pre-fab, I take a little time to politely educate them on our "from the ground up" construction process. From the location where I work, we draw the plans, figure and ship the materials, build it on-site, and even handle the financing and insurance in some cases. We're just like any builder out there, but since we have model parks like manufactured home companies, we still have that pre-fab stigma.

PS... no, I'm not a salesman, I'm a designer and estimator.

[getgreg]

This is really fascinating because we're dealing with the education of the buying public. There's no way to categorically argue that a modular/prefab home is less well built than a stick frame. I think it's only a matter of time before modular housing earns its due, and people understand their value. Homes are the only mass market commodity not built in a controlled environment. In this day and age, the waste in terms of material and labor is unnecessary, and new generations of homebuyers are becoming more and more savvy to sustainable building. In fact with prices these days, they might not have a choice down the road...

[masons_dad1]

A manufactured home that is set on bricks is not considered a real house unless it is laid onto a cement foundation in which it then becomes a house and not a manufactured home. Another thing that will increase the value of a manufactured home is if the owner bricks up the lower half of the home and include a crawlspace when laying the foundation. Also, when customizing a new banufactured home the buyer can request the same specifications and materials used in a site built home. It adds a few thousand dollars to the overall cost of the manufactured home, but will greatly increase the appreciation value of it. With all these criteria met a manufactured home costs nearly half as much as a site built home but will increase in value nearly as much as a site built home.

I've done a lot of research on manufactured homes and there are a lot of legitimate websites that deal with them.

[dimebag1980]

Panelization is becoming more popular. In this process, the entire home isn't built and assembled in a plant, but rather the floor, walls, and roof are built in a plant and then shipped to the site to be erected as a "modular" home. But for whatever reason, a panel-built home has a better overall appeal to the general public than a truly modular or manufactured home.

The public's negative perception of these types of homes stems mostly from two main ideas. The first idea is the "trailer" of the 1970s and 1980s. You know what I'm talking about. They're still out there, all over the place, and they do nothing to help the image of the industry. The second idea is that manufacture homes are tornado magnets. Heck, even knowing what I know now, I still have a hard time not thinking that. If pinned down, a manufactured home is as strong as a site-built home in some cases, but the public still has a hard time seeing that, as most times these homes aren't pinned down but rather set up on casters to get blown away by storms.

[tamias6]

Its not just the red necks and trailer trash image problem with manufactured homes. Its also the fact that when you add up the lot rent and the monthy payment to pay back the loan on the home itself you get a small to midsized house payment. I.E. $340-$360 a month (MI) plus $500 to $800 a month depending on the on a new manufactured home. *Cha-Ching* the total can get me into a fairly nice stick built house in a decent 'hood. What if you want to put the home on a peice of land? You run into problems of local code discuraging where modulars and manufactured homes can go which leaves them far away into the sticks. Added to that vacant land is usually way and gone out in the sticks as well. So comute times are long. The way gas prices are today, the closer I can get to the core city the better off I am. Oh and let's not forget the math here too. $40,000 to $60,000 for a desent peice of land (MI again) plus $50,000 to $100,000 for the home itself plus another $20,000 to $40,000 for site improvments and what to we get? The price of a nice conventional stick built house.

If that wasn't enough, there is still the fact that appreciation is a problem with manufactured homes. If you buy a manufactured home and stick it in a mobile home park, you might as well forget any idea of increasing property value despite what manufactured homes sales people tell you. Infact, a manufactured hame in a mobile home park will deppreciate like a car. 18 years ago we purchased our mobile home for $12,000. We've invested more than double that amont in home improvments. If we sold our mobile home today we would be lucky to get $500 dollars, the price of a winter beater around these parts. Manufactured homes on land is not so bad. But property value will not appreciate as fast as it would if the land had a stick built home because of the fact that manufactured homes themselves do not appreciate in value as a regular home would. So its up to the land itself to appreciate. Example, in my area I can get into a couple of acers of land with a nice stick build home for about anywhere from $180,000 to $250,000. But if that home were a manufactured home, even a newer one, the selling price would drop about $50,000.

[Jerseyman4]

Mid-Atlantic Building Systems - Candor, NC.

Im sure they make good business in Montgomery County! Their county slogan is " Welcome to Montgomery County, A GOLDEN OPPURTUNITY! ".

[pyper]

I see a lot of myths and misinformation presented and corrected in this thread.

For examples of Manufactured Housing communities that may have appreciated, contact theManufactured Housing Institute

I toured a developement in Maryland that was pretty spectacular. They claimed the houses were much stronger than site built; rolling sheetrock down the highway requires strength. The particular houses I looked at had 2x6 studs assembled with glue and steel in the floor. They were also 2 stories. Nifty stuff.

What qualifies as "real estate" varies by state. In most places if you have it anchored to the ground (concrete or not), have it hooked to utilities, and own the land, then it's real estate. In *any* jurisdiction, it's real estate if you have a mortgage (by definition).