Debunking Myths

Reprinted from Tulsa World, October 5, 1998
By D.R. Stewart
World Staff Writer

Inexpensive manufactured homes keep value
With apartment rental rates climbing and more people wanting their own homes, Doug Gorman is having no trouble selling Oklahomans on manufactured housing.

For about most people’s monthly car payment, Gorman can get a buyer in a 1,440-square-foot four-bedroom, two-bath home that is spacious, airy and bright. Instead of paying $500 a month in rent that is not tax-deductible, Gorman invites buyers to consider the 1,440-square-foot manufactured home for $272 a month. It comes with monthly tax savings of $75 since mortgage interest payments are tax-deductible.

“But you need a lot, and I would figure $150 a month for the average lot in Tulsa,” Gorman said. “We could put the land and house payment on one note. And we do improvements — driveways, septic systems — so you could be in your own home for about $400 a month and that includes carpets, drapes, kitchen appliances, concrete piers and skirting.”

Gorman, president and chief executive officer of Home-Mart Inc., 9516 E. Admiral Place, one of Oklahoma’s largest manufactured home dealers, says most people have a host of misconceptions about his line of work.

“We get an unfair stigma because most people think of our homes as separate from the land,” he said. “But today, less than 3 percent of manufactured homes sold are moved.

“Depreciation is a misconception. They might have decided they are going to buy a manufactured home, but they believe they are going to be dealing with serious depreciation, which is not true. And people also think these homes are not well-made. But they have 2-by-6 (inch) sidewalls, R-33 insulation in the ceilings and R-19 in the walls, which exceed HUD (Department of Housing and Urban Development) recommendations for this area, Thermal pane windows, oak cabinets.”

Gorman is resigned to dealing with the skepticism about manufactured homes, which most people refer to as mobile homes or trailers.

Since June 15, 1976, all manufactured homes have been built to a national construction code that is administered by the Department of Housing and Urban Development. The homes are built at an off-site manufacturing plant for installation or assembly at the building site, and they bear a seal certifying that they are built in compliance with the federal Manufactured Housing Construction and Safety Standards Act of 1974.

“If I gave you the choice of having a brand-new Cadillac right off the assembly line in Detroit or getting the parts and having a crew assemble it in an open field, exposed to the elements, for 40 percent more, which one would you rather have?” Gorman said. “Nobody would want a hand-built Cadillac out in the field that would cost you 40 percent more.”

Construction costs that are a third or half as much as traditional, site-built homes account for the growing popularity of manufactured housing, industry officials say. Building a manufactured home costs from $25 to $45 a square foot compared with $65 to $95 a square foot for traditional housing.

In 1997, according to the U.S. Department of Commerce, the average sales price for the average 1,420-square-foot manufactured home was $41,100, or $28.94 per square foot. That same year, the average new site-built home of 2,150 square feet sold for $132,150 or $61.47 per square foot.

Last year, 353,000 manufactured homes were sold, which was 24 percent of new housing starts in the United States, the Commerce Department survey found. During the past five years, manufactured home sales rose 67 percent in the U.S. but leaped 302 percent, to 7,017 homes, in Oklahoma.

The industry’s success has rubbed off on Home-Mart, which last year posted sales of $12 million, a 20 percent increase compared with the previous year and a 145 percent increase over 1992 sales.

Millie Gorman, vice president, secretary and treasurer, said one key to Home-Mart’s success has been computerization of the company’s records.

“Our sales force can instantly look at a customer’s situation, look at our data base and match the customer with a home,” she said.

Celebrating 10 years in business, Home-Mart has arranged with Fuqua Homes Inc. of Arlington, Texas, to begin making a special anniversary series of manufactured homes: a four-bedroom, two-bath, 1,771-square-foot home with vaulted ceilings and other amenities for $49,987 or payments of $325 a month.

“People have to have housing,” he said. “And I think we are here to stay.”

---

Editor’s Note: We’d encourage MH Industry companies, pros and trade associations to share their experiences in getting positive media coverage. Please email latonyk@gmail.com with your submission for inclusion. If you want to describe your experience, please post your comment below. Thank you.