There has been a lot going on these past several weeks, so let’s get right to it.  Sadly, some of it is very unfortunate.

First, Bruce Stoyer, General Manager of the Golden West/Oakwood plant in Albany, Oregon and a 35 year veteran of our industry passed away suddenly October 19, 2004 due to complications from surgery.  If you knew Bruce you know what a loss this is for our industry, much less his family.  Bruce was a great guy, a straight shooter, very smart, and possessed exceptional vision.  The products he produced and the dedication he had were legendary.  Golden West, under Bruce’s leadership lead this industry in the 1970’s and 80’s with innovative new designs that set the standard for the creative, modern manufactured homes of today.  For someone to stay with the same company, through good times and bad for that many years proves Bruce has left shoes simply too big to fill.  Our condolences to the Stoyer family and their extended family of co-workers, customers and business associates.

Also, Ray Robinson, owner/founder of Ideal Trailer Sales (now Ideal Homes) in The Dallas, Oregon passed away October 15, 2004 at age 78 from complications stemming from emergency surgery.  Ray was one of the original Oregon retailers and was active in the formation of the original dealers association.  Always an outgoing and charismatic character, Ray started Ideal in 1951 and the business grew into several manufactured home communities and dealerships.  Son Gary Robinson continues to operate the original dealership adjacent to I-84 in The Dallas.  Ray and his infectious personality will be greatly missed.  Our condolences to the Robinson family.

On a more positive note, 2004 is almost over!  Honestly, what a challenging period this has been for our industry.  Everyone, including me has an opinion as to why we continue to experience such slow and stodgy progress but few disagree that financing continues to control our destiny.  Land and home financing, while plentiful is not what I would call easy.  As we reported earlier, most land & home transactions require documentation that exceeds a comparable site-built home loan.  Add to this the complications arising from purchasing the home from one source, the land from another and the improvements from a third and it’s no wonder our customers find “instant housing” much more difficult than it ought to be.  Still, most progressive manufacturers and retailers recognize this challenge and are getting better at helping the consumer streamline the buying process.  What is interesting is that the more expensive manufactured homes seem to be outselling the less expensive homes 5-1.  You would think that, with competition from site builders and condo projects we would be seeing more opportunity in the “low end” market, but manufacturers and retailer’s alike report the middle to high-end market is the strongest.    

In the land-lease community business we continue to enjoy two positive trends.  First, repossessions continue to decline overall, meaning that there are fewer and fewer homes being wholesaled out to real property and away from manufactured home communities.  Don’t get me wrong….it still happens, just not nearly as often as it did a year or two ago.  Community owners continue to buy up these homes before lenders wholesale them out and community owners continue to offer financing on these homes.  Second, we are slowing seeing a trend toward more new homes moving into the communities.  Chattel financing is out there and getting a bit more competitive, with US Bank, CU Factory Built Lending, Origen Financial, Green Tree, Country Place (Palm Harbor) 21st Mortgage and Vanderbilt (Clayton) all solid and viable lenders competing for quality, transparent chattel loan business. 

The September/October 2004 issue of Modern Homes Magazine (published by MHI) concentrates on the “Rise of the Manufactured Home Community”, including great articles on protecting and enhancing home values, investing in a community and community renewal and upgrade methods.  This publication, while sometimes overly optimistic, has great articles that help us learn what is going on around the nation in our industry.  Your state associations are members of MHI and regularly supply them with regional news and information.  If you don’t subscribe, contact the Manufactured Housing Institute at www.modernhomes.org

Stocks in manufactured housing companies have been up and down over the past years as cost cutting measures and consolidations seem to agree with analysts and investors.  There are exceptions to this, but overall the stocks are up dramatically from three years ago, but below 52-week highs.  As I am writing this Fleetwood is at $12.78, Champion $10.72, Palm Harbor $15.51 and Skyline at $39.00.  Oh, and Berkshire Hathaway is at $83,950.00 a share if you want to own a piece of Clayton/Oakwood/Golden West, Vanderbilt & 21st Mortgage.

Finally, one of the most interesting business developments in the Pacific Northwest took place a few weeks ago.  Mike Wolf, longtime Sales Manager and GM at Marlette in Hermiston, along with former Oakwood CEO Miles Standish bought controlling interest of Kit Homebuilders West in Caldwell, Idaho.  This is an exciting development as Mike has a long and successful track record at Marlette and knows how to build competitive homes that consumers like.  I support more independent investment in our regional manufacturing facilities and Kit is now well positioned to fill a niche market and be creative where other manufacturers may have trouble changing quickly with the marketplace.  Best of luck to Mike, Miles, Alan Snitily and the rest of the folks at Kit.

We have never faced a more important election than the one on November 2, 2004.  Regardless of your political persuasion, please exercise your right to vote.  It is the freedom to vote and choose our leaders that makes The United States of America the greatest country on earth.

Thank you for taking a few moments to read this Industry Update. 

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