One of the most fascinating manufactured housing-related business events in recent memory was concluded today in New York City as shareholders of Clayton Homes voted to approve the purchase of Clayton by Warren Buffett's Berkshire Hathaway group. William Gray, President of Orbis Investment Management Limited and a strong opponent of the sale, said "Warren Buffett has a great eye for value. Clayton Homes is a prize acquisition." As 52.3 percent of all outstanding shares voted for the $1.7 Billion cash sale today industry experts immediately began second-guessing what this means for all of us in the industry.

First, it's certainly possible that Buffett's ownership position in Oakwood Homes will somehow result in a merger of the two businesses, ultimately spinning off assets and business units where efforts are duplicated or manufacturing and distribution channels overlap one another. Second, the results of this acquisition (some refer to it as a merger) will undoubtedly bring additional credibility to our industry on a national level and attract renewed interest in the manufactured housing sector. Mr. Buffett is known as a shrewd businessman with an uncanny ability to invest in struggling industries and/or companies with a bright future, so you can assume that banks and investors will be looking harder at investing in companies related to manufactured housing. Any way you slice it, it's all good news for us. Coupled with the recent announcement from US Bank that they are entering our industry as a full service chattel lender and you have some solid evidence that our future is looking brighter.

Specific to our region, manufactured housing sales are still stuck in neutral and manufacturers struggle to keep backlogs filled at their plants. The repossession "hangover" still exists, although recent reports show repossessions down slightly from June of 2002. Some lenders are still offering competitive financing on their repossessions (Chase, Origen and Associates Housing), some are still looking for wholesale or retail buyers with their own financing (Greentree, Washington Mutual, Greenpoint). Overall it appears prices have stabilized, which is great news. Frankly, prices are too low on repossessions and we will never see a resurgence of home sales in our communities until the repos stop competing with private party home sales. Once residents are able to sell their homes again for reasonable prices, the market will rebound. Until them, we're still rearranging the deck chairs on the titanic, albeit we dodged most of the more recent icebergs.
Affordable mortgage financing for manufactured homes on land continues to be plentiful although everyone is keeping a close eye on how Fannie Mae's recent changes will effect sales. Freddie Mac has not followed suit, and most lenders have unfettered access to Freddie Mac conforming loans. Should Freddie Mac follow suit, we could be in for another setback, as retailers and manufacturers scramble for affordable mortgage financing. More and more lenders are going after the modular business, leaving HUD code manufactured home buyers searching for competitive loan products.

It is that time of year when industry conventions and golf tournaments are in full swing (sorry for the pun). The Oregon Manufactured Housing Associations Political Action Committee-PAC tournament is Tuesday, August 19, 2003 at Langdon Farms in Wilsonville, Oregon (just south of Portland on I-5). This is a terrific tournament with great door prizes and it's for a very good cause. Contact OMHA at 503-364-2470 for information. The Manufactured Housing Industry Living Tribute (MILT) 10th annual tournament is Thursday, September 25, 2003 at Tumwater Valley Golf Course in Tumwater, Washington. This tri-state all industry tournament is named after longtime industry personality Milt Minor who passed away in 1993. Providing home ownership assistance to moderate income families since it's inception, this tournament is a great opportunity to help a good cause, have a lot of fun and network with other business associates. For more information on the MILT call WMHA at 360-357-5650.

Manufactured Housing Communities of Oregon is having it's annual convention October 13, 14 and 15, 2003 at the Valley River Inn in Eugene, Oregon. A golf tournament and 2 full days of educational seminars makes this a great convention for community owners and operators. Contact MHCO at 503-391-4496. Manufactured Housing Communities of Washington is hosting their convention in Yakima, Washington this year from September 25-26, 2003 at the Doubletree Inn. Another important convention, this event is also very informative and useful for community owners and operators. For more information contact MHCW at 360-753-8730.

I encourage you to attend as many of these events as possible. Supporting your industry association's has never been more important, and making new contacts with other industry professionals can provide you with the resources you need to survive and prosper during these uncertain times.

Greg Harmon - President
Commonwealth Real Estate Services
E-mail: greg@cwres.com
Telephone 503.244.2300 Ext. 101