MHMSM.com presents Factory Built Housing Industry News at Noon with Erin Patla.
Coming up – The annual growth rates in 15 of the 20 MSAs and the 10- and 20-City Composites improved in May compared to those reported for April 2010
But first…these stories:
The Knoxville News reports that Clayton Homes Inc. is partnering with the Clinton Foundation to provide low-cost modular classrooms to Haiti as part of the effort to rebuild the country following the recent devastating earthquake. The newspaper reports Clayton Homes, the largest U.S. maker of modular and manufactured houses, has reduced the cost of the classrooms and modular homes and wants the project to be a model for assisting other countries with housing and school building needs. According to the report Clayton Homes contacted the Clinton Foundation with an offer to assist after the former president was named to head the Haiti relief effort.
The Tulsa World recently ran a feature on Oklahoma retailer Doug Gorman. Gorman owns Home-Mart, which he established in 1988 and has long been an advocate for the industry. In an opportunity to highlight the benefits of manufactured housing to the general public that’s too infrequent, Gorman pointed out that the average lifespan of a manufactured home is more than fifty years, a number on par with a stick-built house. Gorman told the paper his own decision to purchase a manufactured home was primarily influenced by a wish for amenities that were not available when renting. That home held its value, selling for the same amount it was purchased for three years later. In the interview Gorman also pointed to a recent boost in sales from the Homebuyer Tax Credit saying about 30 percent of our buyers at the time were driven by that particular motivation.
“Up next, The annual growth rates in 15 of the 20 MSAs and the 10- and 20-City Composites improved in May compared to those reported for April 2010”
But first, this podcast of News at Noon is sponsored in part by:
Precision Capital Funding, on the Web at CaptiveFinance.net. Precision Capital Funding earned the MHI 2010 Service Supplier of the Year Award.
For more information, email Kenneth Rishel at kennethrishel@captivefinance.net or call 217-971-3968.
Now back to our stories.
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DATA THROUGH MAY 2010, released recently by Standard & Poor’s for its S&P/Case-Shiller1 Home Price Indices, the leading measure of U.S. home prices, show that the annual growth rates in 15 of the 20 MSAs and the 10- and 20-City Composites improved in May compared to those reported for April 2010. The 10-City Composite is up 5.4 percent and the 20-City Composite is up 4.6 percent from where they were in May 2009. While 19 MSAs and both Composites reported positive monthly changes in May over April, only 12 of the MSAs and the two Composites saw better month-over-month growth rates in May than those reported in April.
“While May’s report on its own looks somewhat positive, a broader look at home price levels over the past year still do not indicate that the housing market is in any form of sustained recovery,” says David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s. “Since reaching its recent trough in April 2009, the housing market has really only stabilized at this lower level. The two Composites have improved between 5 and 6 percent since then, but this is no better than the improvement they had registered as of October 2009. The last seven months have basically been flat.”
According to the report, as of May 2010, average home prices across the United States are back to the levels where they were in the autumn of 2003. Measured from June/July 2006 through May 2010, the peak-to-date figures for the 10-City Composite and 20-City Composite are -29.6 percent and -29.1 percent, respectively.
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IN FINANCIAL NEWS, Sun Communities announced last week that it has obtained a committed equity financing facility under which it may sell up to $100 million of its registered common stock to REIT Opportunity, Ltd. over a 24-month period. Sun is not obligated to utilize any of the $100 million facility and remains free to enter into and consummate other equity and debt financing transactions. Sun says it did not pay a commitment fee or issue any warrants to secure the facility.
Stocks were down nearly 150 points Friday but recovered late afternoon to close down just 21 points at 10,653. For the week, the Dow was up 187.62 points, or 1.8 percent, representing three consecutive weeks of gains. UMH Properties moved up nearly four percent to close at $11.83 per share, but others in the manufactured housing industry closed down including Cavco, Palm Harbor and Skyline Corp. Friday’s Manufactrured Housing Composit Value was down three percent. ____________________________________________________________________
INDUSTRY CONSULTANT DICK ERNST says he can’t speak for the site builders, but the manufactured housing industry has definitely learned its lesson from the easy-credit, no money down fiasco in the 1990s.
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Read discussion of this topic, plus a return of private financing and the future of Fannie and Freddie in the second part of MHMSM.com’s exclusive interview at MHMSM.com/eric-miller/Ernst-interview2.
“On behalf of Production and IT Manager Bob Stovall, Editor L.A. ‘Tony’ Kovach, Associate Editor Catherine Frenzel, INdustry in Focus reporter Eric Miller, and the entire MHMSM.com writing and support team, this is Erin Patla. G’day!”