Tag: Manufactured Homes

Manufactured and Modular vs. ‘Stick-Built’ Homes: Here Are My Thoughts

There has been some confusion in the real estate world over the term “manufactured” homes. Most recently the term has been applied to mobile homes — also referred to as single-wide or double-wide homes, which are transported fully finished to mobile home parks.

But “manufactured,” as I understand it, can be applied to a home whose walls, trusses and other components are put together in a warehouse, then shipped on flatbed trailers to a construction site where they are assembled and installed on a standard concrete foundation.

A “modular” home goes a step further, in that entire rooms might be assembled in a warehouse, transported to a work site and then assembled with other modules to make a complete house.

The first home I bought in Colorado was a ranch with walk-out basement in Golden’s Mesa Meadows subdivision. Only after I had moved in did a neighbor share with me how my home was put together in a day or two. Its components were manufactured in Fort Morgan and delivered to Golden only after the concrete foundation was ready to receive them. Anyone looking at the home would think it was a  “stick-built” home like the other homes in the neighborhood. When I bought it and when I later sold it, it wasn’t listed on the MLS as “manufactured,” because that would have felt like a misrepresentation, given the type of home it was.

The neighbor who explained that my home was actually built in Fort Morgan and assembled on site, explained how that process made for a better home. The exterior walls were 2×6 construction (to withstand the rigors of shipment) and they were fully insulated on the factory floor rather than on-site, resulting in better quality control. It made sense to me. It also made me wonder why more homes aren’t built that way.

I remember learning that an affiliate of Habitat for Humanity in Minnesota or Wisconsin constructs homes that way during the cold winter months — having volunteers assemble entire wall units in heated warehouses during cold spells, then delivering them to the site later on.

Every conventionally built home uses roof trusses that are made to order on factory floors and shipped to work sites on flatbed trailers, so why not have wall units made to order as well?

From 1933 to 1940 Sears Roebuck sold mail-order “Kit Homes” that were “pre-cut and fitted.” A 2-story colonial-style home called the “Martha Washington” was sold by Sears for $3,727. Other kit homes had names like the Cape Cod, the Ridgeland, the Franklin, the Dayton, and the Collingwood. See below for that model’s description from the Sears catalog. Many homes in Denver were built from Sears kits, but you’d never know it. Original owners of those homes are long gone, and the current owners of them probably have no idea.

There are definite economies to building homes that are “pre-cut” and partially pre-assembled off-site. For one thing, the factory workers can work every day regardless of the weather and even in multiple shifts. They can be more productive in a heated warehouse. There will be more efficient use of materials and more recycling and reuse as well.

Right now, the growing “tiny home” market is doing such construction and delivering modules or even entire homes to work sites, enjoying great economies in doing so. There is no reason that more elements of larger homes couldn’t be built off-site and delivered to construction sites for final assembly.

One example of off-site modular construction utilized in the building of sustainable homes is Structural Insulated Panels or “SIPs,” shown here.  Two sheets of sheathing have 4 to 5 inches of foam insulation between them. SIPs can replace walls built with wood framing and provide superior insulation.

Impresa Modular is a West Virginia company with a great website (www.ImpresaModular.com) describing the many kinds of off-site home construction methodologies they employ and sell.

There is so much innovation happening in home construction, much of which can not only reduce construction costs but can result in better insulated homes.

Here’s a picture of the manufactured home belonging to Butch Roberts of Salida, who sent the comment below:

Big Entities Target Mobile Home Parks, the Last Bastion of Affordable Housing

I just finished watching John Oliver’s riff on mobile homes. If you’re not familiar with his HBO show “Last Week Tonight” or don’t get HBO, the good news is that his single topic take-outs* are archived on YouTube, where you’ll be glued to your computer screen for an unending series of  take-outs that only starts with his take-out on mobile homes.

Here’s what I learned from watching John Oliver’s piece and was able to confirm by talking to others. Sometimes I wish I could be a full-time journalist again so I could really do investigative reporting, but I’m a Realtor now and have to depend on others like John Oliver and David Migoya of the Denver Post doing the heavy lifting. So, instead, Google is my friend. And there’s so much to learn just by Googling.

The big trend in mobile homes is the influx of big corporations like Warren Buffett’s Clayton Homes in the mobile home park business. Historically, such parks were “mom and pop” operations, but it was inevitable that mom and pop got old and, even if their children had an interest in taking over the family business, it was more profitable to sell the park to a developer or to a company like Clayton Homes.

What makes a mobile home park a great investment is that, while people own their mobile or “manufactured” home, they rent or lease the land on which it sits. The land owner can raise the rental fee without limit because, while the home can technically be moved, it would cost thousands of dollars to do so, and there’s little choice of where to move it. You can’t just buy a lot somewhere and put your mobile home on it. I checked with Jefferson County, and you can only install a mobile home on land zoned for mobile home parks. That rule feeds right into the greed motivating those corporations which, like Clayton Homes, are buying up every mobile home park they can.

Another thing about mobile homes is that, while they can be really nice when they’re brand new, they do not appreciate in value like regular homes. Rather, they decline in value like a car or like the “personal property” they are. Also, since they’re not “real property,” you can’t get a mortgage on them for 4% over 30 years, you get a chattel loan at 15% and for a shorter term.

Thus, if a mobile home owner can’t afford an increase in land rental for their home, their only choice often is to simply abandon the home that they paid thousands of dollars to buy. Since it becomes abandoned property, the mobile park owner can then assume ownership of it, or scrape it depending only on what makes financial sense. And down the road (so to speak), they can kick out the remaining occupants and sell the entire mobile park to a developer.

This is a heartless process, but it’s how our free enterprise system works. So, what can be done about it?

On January 21st Golden United sponsored a public meeting on the subject of manufactured housing which I attended, along with several city councilors and civic minded people. Sadly, only a handful of the attendees were residents of a mobile home park.

The main presentation was by an organization which organizes residents of mobile homes parks to form an owner’s association which might then outbid other buyers of the park when the current owner attempts to sell it. This organization, called Resident Owned Communities (ROC), was featured briefly in John Oliver’s piece.. (Fast forward to 13:10.)

What local governments could do to address the problem, Oliver said, was to legislate a “right of first refusal” by which an owner’s association or other non-profit entity serving the interests of mobile home park owners, would be able to match any bona fide offer by a for-profit buyer, and purchase the mobile home park. I’m not aware of any such legislation or other public policy aimed at protecting manufactured house, which is, after all, the last bastion of affordable housing in most cities.

Mobile home parks have few friends among owners of conventional real estate, but however you might feel about them, I hope you feel they are worth preserving.

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*“Take-out” is a journalistic term for an in-depth look at a single topic. During my 1968 internship at the Washington Post, I was tasked with writing a 3-part series on the solid waste industry in the District of Columbia. I enjoyed telling people that I did a “take-out on trash.”