We are seeing signs of an uptick in Industry home shipments, as reported by the Manufactured Housing Institute (MHI) in recent months. What is the potential of the Manufactured Housing Industry today? What are the factors holding back the sales of manufactured homes? Let us take a brief survey of this timely and important topic.
In the upper Midwest area of Chicago where I am based, new manufactured housing costs tends to be about 40% or so below the price of new conventional construction that is similar in size. While the percentage of savings may vary from region to region, perhaps with lower savings in the South, higher savings in the North, we know that generally factory building can produce quality while saving money. Let’s imagine we had a cell phone called the xPhone that looked like and performed like an Apple iPhone, but was 40% lower in cost. One might imagine that the market potential for that product would be huge.
So applying that analogy to the manufactured housing industry, what are the elements or factors that support our growth, and what are the items that hinder our growth?
Industry Growth Factors include, but are not limited to:
- aging housing stock in much of the U.S.
- ever growing U.S. population
- high cost of conventional housing construction
- declining incomes
- growing population of retirees, limited fixed incomes
- the perception that Earth’s resources are limited or dwindling, and that greener more sustainable designs and building processes make good economic and public policy sense.
Hindering the manufactured housing Industry’s growth factors include, but are not limited to:
- remarketing, resale of homes; the lack of a strong resale mechanism that mirrors the real estate market hurts hampers every aspect of our Industry; starting with financing
- the appreciation vs depreciation issue
- the image issue (some of this is due to older ‘mobile home parks’ with old pre-HUD Code mobile homes, but other factors contribute, such as the media, lack of PR/remarketing, etc.)
- lack of a broad based marketing, educational, image building outreach to Americans and public officials; while a national GO RVing style campaign that worked so well for the recreational vehicle industry has been spoken about many times, it has never gone beyond the discussion stage in the manufactured housing industry as a whole
- financing and regulatory challenges
- a wide variety of skill sets among industry professionals, from companies who do a solid job of personnel development, motivation and training, to firms where the lack of same is dismal and apparent.
These lists could go on. But the point is this; the start of any growth program is candidly identifying the issues, and then just as honestly and aggressively addressing them!
The half a loaf is better than none approach has always made sense to me. Some states or area associations have done videos to promote the manufactured home lifestyle. One effort that has drawn attention and results is linked below:
We need more companies that will do, individually or in tandem with others, their own marketing and educational campaigns. We need more associations and organizations, individually or in unison with others, working to tap the incredible potential of the factory built housing world. We need some action, vs. more talk.
What is our industry’s potential?
On pages 107 – 108 of the new book, The Manufactured Housing Revolution, we see a common sense process that could grow sales to 229,600 HUD Code homes per year, to higher end range of 816,060 homes per year! That top number would represent an industry record year.
What are you willing to do to make those numbers a reality? It is your future. Let us work smarter to make that future brighter and more profitable. # #
L.A. ‘Tony’ Kovach, MHM
Manufactured Home Marketing Sales Management trade journal at www.MHMarketingSalesManagement.com aka www.MHMSM.com
tony@mhmsm.com
847-730-3692
