News Update - August 6, 2002
Current Industry Evolution Will Have Positive Effect
 
The evolutionary process taking place in the housing industry throughout the Pacific Northwest will have a very positive effect on the manufactured housing business in the near future. I would like to take a moment and outline for you specifically which events I am referring to. Frankly, some of the points to follow are my own observations, some are observations from others that I will pass onto you.
 
DENSITY. Throughout the Pacific Northwest city and county planners are encouraging, if not mandating density in housing. Row houses, high rises, subsidized inter-city apartments, single family homes on 2500-4000 square foot lots. Although this makes some site-built housing affordable and more competitive with manufactured housing, purely because small homes cost less than big ones, it also makes our communities very appealing to homebuyers. Especially after living for a while in such crowded surroundings. Most manufactured home communities have 4000-6000 square foot home sites, plenty of yard for flowers, a lawn, patios and vegetable gardens, and ample parking for your car, parked right by your front or back door. While today's dense inter-city housing provides the resident with easy access to expensive and trendy restaurants, it doesn't offer them the peace and quiet (and space) surrounding a manufactured home in a nice community.
 
SYSTEM DEVELOPMENT CHARGES (SDC'S). These charges have a tremendous impact on the cost of building a new residence. Ultimately it's the homebuyer that pays these fees, as they are passed on to them by the developer in the price of the property. My question is: Are we telling this story to potential residents of our manufactured housing communities? Do they realize that if they place a home in an existing space where a home was previously located that they cost is very, very minimal, with the prior resident or dealer fronting those SDC's? If you put a pencil to it, moving a home into a previously occupied home site is a screaming deal for a new homeowner!
 
LOW PRICES ON NEW HOMES. Our friends in the manufacturing business have found more ways to cut costs, lower profits, squeeze suppliers and increase efficiencies than you can believe. And the result is new manufactured home prices that haven't been this low in nearly a decade. Fleetwood Homes of Oregon, just to name one factory, is building a fantastic looking 1340 s/f home that can be delivered to the site for less than $35,000, very nicely equipped. It's a great time to buy a new manufactured home and place it in an established community that's had some recent vacancies. Can buyers really recognize a great buy when they see one? It's up to us (and clearly our onsite managers) to tell this story to anyone who will listen.
 
DOWNSIZING AND SIMPLIFYING. The aging population is not giving up on their plans of downsizing and simplifying their living situations, regardless of what the economy does. No industry offers a better value than manufactured housing communities geared toward those 55+. What a terrific concept, a safe and secure neighborhood, a true community atmosphere, and a comfortable lifestyle offering minimum-maintenance living. It is the one part of our business that provides our greatest opportunity for growth in my opinion, and one housing choice that is often overlooked by the aging baby-boomer generation.
 
FINANCING. Rapid progress is being made in Washington and Oregon to streamline and simplify the process of meeting the criteria established by Freddie Mac's conforming financing program for homes in rental/land lease communities. Many community owners are wary of the risks involved in signing a long term lease associated with this program, but is still provides another potential financing source for our customers and may save many half-empty parks from suffering for years to come from slow fill-up rates.
 
Bottom line . . . there are many positives and many opportunities out there for manufactured home sales and manufactured housing communities. During these turbulent times, we will stay focused and work hard to promote these many benefits associated with manufactured home living.
 
Greg Harmon - President
Commonwealth Real Estate Services
E-mail: greg@cwres.com
Telephone 503.244.2300 Ext. 101