That is so on any issue you care to mention: sports, fashion, politics, religion, health, fitness, business — including manufactured, modular, and prefabricated housing.
Factory-home building – says John Bostick, Sunshine Homes president – is widely accepted in Japan, but is resisted here.
Why?
Like our domestic manufactured home industry’s politics, the honest answer isn’t simple. Rather, “It’s Complicated.”
If the answer were simple, then the industry would be producing hundreds of thousands of homes per year, as leaders such as Bostick, or:
> Sam Landy, President and CEO of high flying UMH Properties, or
> M. Mark Weiss, President and CEO of the Manufactured Housing Association for Regulatory Reform,
> L. A. ‘Tony’ Kovach, multiple award-winning MH Industry trade publisher and consultant, are among a variety of industry professionals who have said so.
Among the topics we will dive into during the month of April are the issues that can be identified or suggested as causes for the modular and manufactured housing industry’s relatively low levels of sales, juxtaposed to its significantly higher potential.
MHARR and MHI
MHARR’s rival, the Manufactured Housing Institute’s (MHI) president and CEO, Richard ‘Dick’ Jennison, flipped from saying in 2014 that the industry should not expect a more robust recovery. Jennison said in a 2014 MHProNews interview that the industry would slowly rise towards 100,000 (+/-) annual shipments. After that interview, when he was pressed on that claim, he later publicly said less than a year later that the industry was capable of 500,000 shipments a year.
That’s a notable swing. But in both cases, Jennison qualified even that lofty half-million new homes a year potential by saying it would have to be achieved over time, at a relatively slow, steady pace.
Why should the pace be slow, instead of a more rapid recovery to the industry’s historic new home sales levels? Given the affordable housing crisis, isn’t the industry’s potential even greater today?
Is Jennison correct? Are there technical or practical reasons for a slow growth in manufactured housing? Such questions deserve a look.
Financing
Dick Ernst, consultant and financial services board member at MHI, says there is “no lack of capacity” among the industry’s current lenders to
finance credit-worthy sales.
Credit Human’s (formerly CU Factory Built Housing) Barry Noffsinger has agreed on that point.
Noffsinger added an interesting twist, when he told 2017 Tunica Show seminar attendees that the Manufactured Housing Industry needed “to fish in the right pond. “
His analogy was to convey the notion that if real estate agents and home builders could attract and sell qualified customers with an average FICO score around 728, then why is manufactured housing’s average credit score so much lower?
Says Noffsinger, it’s the pond of less qualified customers the manufactured home industry is generally fishing in. The charts and graphics on this page were produced by him, and the entire presentation is linked as a download, here.
Results reported by Tom Fath, of New Durham Estates – in an upcoming, special video presentation by Fath – will be provided in the days ahead. In that video, Fath details the changes their operation made, and how it dramatically increased their sales and boosted the quality of the cash and good credit customers they profitably attracted.
Other industry lenders on the same finance panel made similar points to Noffsinger’s, pointing out that certain operations attract and sell higher credit scores or cash buyers.
Labor Force
Several HUD Code manufactured home industry producers have told MHProNews that a challenge for them is getting and keeping good factory workers as one of the industry’s limiting factors.
Yet, per figures supplied by Sunshine Homes sales manger Stan Posey, their firm is growing at twice the rate of the industry at large. Sunshine Homes is clearly keeping up with attracting the right pool of labor.
Bostick has told MHProNews that they could “easily” ramp up to double their current rate, in a period of about 60 days, without sacrificing quality. What does Sunshine Homes do that keeps quality and satisfaction of their wholesale and retail customers high, while allowing them to grow their labor force at a more rapid pace? That too will be the subject of Inside MH videos coming in the days ahead.
The MH Industry Take-Away
That there is a rising need and demand for affordable housing is unquestionable. University, government, and non-profit surveys all point to that reality. That the industry could be growing more rapidly is proven by diverse operations like Sunshine Homes – which markets and sells only through independent retailers, communities and builder/developers, or operations like the Fath family’s, or others noted above.
The potential for more rapid and sustainable growth is apparent. It’s a theme that consultant and publisher Kovach has hit for years. See two of his graphics above and below as examples.
What’s the Truth About the Manufactured Housing Industry’s Potential?
The facts and views from informed professionals presented here strongly suggest that the potential for rapid and sustainable growth is enormous. There is no need to return to the failed ‘easy credit’ policies that caused Conseco and other manufactured home loan programs to collapse. The views of those above and others in the manufactured home industry underscore how the industry could climb rapidly and sustainably into several hundred thousand new home sales per year.
MHProNews, as pro-manufactured home industry trade publishers, will continue to spotlight the threats, heartaches, achievements and opportunities for growth in a periodic series of reports, found only here, your home for – Industry News, Tips and Views Pros Can Use. © ##
(Image credits are as shown above.)
(Note: Links added/updated on 4.7.2017.)
