Trulia published a report recently that summarized the 6 concerns on home-buyers minds. The report has implications for manufactured home sellers as well as the broader housing market Trulia was addressing. Let's dive in and see what we can learn from even a brief analysis of their report.
Quoting:
“Worry: Mortgage rates and prices will rise before I buy. Trulia’s Economist Jed Kolko reports that “the top worry among all survey respondents who might buy a home someday is that mortgage rates will rise further before they buy (41%), followed by rising prices (37%).” The worry is valid, given the fact that the market was depressed for so long and has a long recovery road ahead of it. It’s compounded by the fact that buying a home has gone from something that used to take a month or two and now routinely takes 6 months, 9 months, a year or even longer!”
Wow! Every one of these can be turned into a positive for the savvy seller of manufactured homes.
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Rising mortgage rates has often been seen as good for our industry. My own take is more nuanced, but that's a discussion for another time.
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Rising prices – this is another positive for our industry, as housing shortages and even some markets that have bidding wars. When conventional home resale prices rise, the price differential for our new product grows, to our benefit.
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Length of time to purchase. In most cases, we can even order a customized manufactured or modular home and have it done much faster than 6 months, vs. the 6-12 months it may take some to get a mortgage for an existing house.
Quoting Trulia:
“Will: Be aggressive. B. E. Aggressive. Economist Kolko explained, “among survey respondents who plan to buy a home someday, 2 in 3 (66%) would use aggressive tactics such as bidding above asking, writing personal letters to the seller, or removing contingencies, to name a few.” What buyers do and don’t do in the name of aggressively pursuing their dream homes (and, consequently, what sellers expect) is slightly different in every town.”
You could buy about six of the homes at the right for the price of 1 house at the left, size for size.
The one at the right has a double car garage, is more energy efficient and has lower taxes too.
Hello? Anyone's light bulb going off?
Egad and Zoikes MH Pros. Think about this.
The National Association of Realtors (NAR) are running radio spots that underscore this reality of homes selling like hot-cakes in many markets, where some buyers will 'bid higher' (offer more) than the listed asking price.
Here our industry routinely pushes 'affordability,' but look – when people like what they see, buyers are often willing to pay MORE to get what they want.
IMHO, way too many MH retailers and communities are afraid to offer anything but the cheapest home they can get their hands upon. Meanwhile, in the 85% of the housing market where billions upon billions of houses are sold, people will pay more than the asking price, to get a house/location they want.
One of the most popular reads on our ManufacturedHomeLivingNews.com website is the article entitled:
“Who wants to be known as the most expensive factory home builder in a market? Us!”
Clearly, people want to know what the upper end of MH is capable of doing! But another hot read is this one:
A Factory Built Home means you can pick your location and your home.
This last point is something a realtor can't touch. The house is where it is. You may love a home, but hate the location. With factory built homes, you can find a location AND a home that fits your lifestyle, taste and budget.
Ladies and gents, we routinely stress that we don't believe that we need to abandon the roots of affordability that manufactured homes represent. The U.S. Census Bureau tells us that of the 52,100 new manufactured homes placed in 2012, some 23,100 where single sectionals, American's most affordable permanent housing option.
But that means that the other 28,300 placed in 2012 were multi-sectionals. Consider what the U.S. Census Bureau said in a July 24 2013 press release, quoting:
NEW RESIDENTIAL SALES IN JUNE 2013
“Sales of new single-family houses in June 2013 were at a seasonally adjusted annual rate of 497,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 8.3 percent (±20.5%)* above the revised May rate of 459,000 and is 38.1 percent (±22.0%) above the June 2012 estimate of 360,000.
The median sales price of new houses sold in June 2013 was $249,700; the average sales price was $295,000. The seasonally adjusted estimate of new houses for sale at the end of June was 161,000. This represents a supply of 3.9 months at the current sales rate.”
Let's compare this to the U.S. Census Bureau's May 2013 stats for manufactured housing, which said that the average sales price of our homes was $61,100. So at the current pace, the stick builders have 8.33 homes built for each of our homes built.
There is a reason why we are promoting our more 'residential' homes on ManufacturedHomeLivingNews.com – one being that we need to break past the stereotypes held by most people. But the other is that we have the most opportunity to grow in that residential side of the HUD Code industry!
A careful reading of market facts and reports like this one by Trulia ought to be telling us how we need to adjust, because we have the opportunities and are all-too-often passing them by. We will pick the next part of this Trulia survey soon.
Until then, Open Your Mind to the real potential of our market. Forget what you 'think' you know. Look at the market in broad terms. Think “we can too” – not “limited to.” Think marketing and selling to the more qualified buyers vs. the 'get me done' customers.
Let's not abandon the affordable housing side, but let's expand our reach to where the action in the U.S. is the hottest! This works for our clients, so logic suggests that it can work for you too. ##
PS: Check our many Exclusive and Red HotFeatured Articles for August and see the
L. A. 'Tony' Kovach
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