Keeping our commitment to bring you the biggest and best Industry Summit ever, we are thrilled to announce that Barry McCabe, President of Hometown America, the nation’s largest manufactured home community owner/operator, and Vice Chairman of MHI’s National Communities Council will be our Key Note Speaker at Commonwealth’s MANUFACTURED HOUSING INDUSTRY SUMMIT 2006 scheduled for January 18, 2006 in Portland (go to www.cwres.com for registration information). 
 
Barry McCabe is a plain talking, straight-shooter who will entertain you with his comments and enlighten you with his insight .  Based in Chicago, Hometown America is comprised of two divisions - the Family Group with 104 communities and the Providence (55+) group with 49 communities.  Don’t miss this rare opportunity to hear a national leader in manufactured housing share his views and answer your questions.  It’s the best $39.00 you will spend to network with the best and brightest our industry has to offer. Get your sign up information today at www.cwres.com and guarantee yourself a seat at the at the most productive manufactured home conference in the Pacific Northwest!
 
In financial news, most manufacturers are rebounding from years of slumping sales and mounting losses.  Industry leader Champion Enterprises announced results for their third quarter ending October 1, 2005 which included posting a 21 percent revenue increase and a 43 percent improvement in income.  Manufacturing net sales increased 15 percent, their average selling price increased 11 percent, sales at their California-based retail segment grew 8 percent and revenues from modular homes increased 47 percent compared to last year’s third quarter.
 
Palm Harbor Homes, Inc. reported net income for their second quarter and first six months of fiscal 2006, ending September 23, 2005 of $1 Million, compared to a net loss of $2.2 Million a year ago.  The quarter’s profits were diminished by losses associated with Hurricane Rita , both in their Standard Casualty insurance affiliate and from transportation and delivery delays in Texas.  Still, sales for the quarter were up 14 percent year-over-year and their backlog of home orders was 34 percent higher than it was a year ago.  Sales of Modular products were up over 20 percent compared with the second quarter of fiscal 2005.  Most other companies are reporting improving operating results as the market has finally stabilized and consolidations/downsizing begins to show meaningful results.  Look for a little more consolidation as the streamlining of various Clayton Homes subsidiaries continues to evolve.
 
Backlogs continue to grow as manufacturers in the Pacific Northwest continue to report increased home orders from Oregon, Washington and Idaho homebuyers with the increase in production caused primarily by Northern California buyers and some activity from FEMA.  While it is difficult to pinpoint exactly how the FEMA orders have impacted production many producers have disclosed FEMA orders in the hundreds or thousands.  Fleetwood Enterprises disclosed 7500 travel trailer orders and 3000 manufactured home orders from FEMA.  Palm Harbor is building 400 single section homes for FEMA to be delivered by December 1, 2005, Champion will build at least 2000 homes for FEMA, Skyline has sold hundreds if not thousands of homes and RV’s to FEMA and Clayton Homes has sold thousands of single section homes to FEMA.  These sales will make it difficult to know exactly how 2005 turned out compared to 2004 but so far it seems most manufacturers and MHI are counting the FEMA orders separately so that the numbers don’t skew year-to-year statistical comparisons.
 
MHI has taken a huge step toward stabilizing and improving manufactured home resales.  Read their press release below:
  
MHI CAS and MHVillage.com Team Up to Strengthen Resale Market for Existing Manufactured Homes
 

Throughout the nation and specifically in the Pacific Northwest manufactured home community closures are on everyone’s mind.  Recently, the city of Wilsonville, Oregon passed a city ordinance awarding residents of manufactured home communities slated for closure unprecedented concessions.  The new ordinance requires the community owner to purchase a closure permit which application includes providing a closure impact report and a relocation plan for residents, paying for the residents moving costs and paying to house them during their relocation.  This decision is certain to land in court as it relies on the community owner to shoulder the entire burden of the closure yet fails to address any of the land use issues that are driving this phenomenon.  We support the Oregon Manufactured Housing Landlord Tenant Coalition’s and Manufactured Housing Communities of Oregon’s efforts to bring a statewide solution to the 2007 Oregon Legislature.  A statewide solution must include a provision that exempts any and all local jurisdictions from enacting individual regulations (re: Wilsonville) and it must address the impact on the residents and the landlord equitably.
 
Manufactured home community owners must participate in a solution that includes input from chattel lenders of manufactured homes.  A solution that doesn’t include the support of lenders is not a good solution.  Without competitive lending for manufactured homes in land-lease and rental communities our industry does not have a bright future.  I encourage lenders to let your feelings known to your state association executives so that a workable solution includes safeguards that will encourage you to make more chattel loans into manufactured home communities.
 

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