If you are sitting in your office today reading this e-mail, you are a survivor of probably the worst year in our industry’s history, if not nationally at least in the Pacific Northwest. In some areas it felt like more manufactured homes were repossessed than built in 2002, and there were certainly more somber closures than grand opening celebrations. Pay cuts and layoffs replaced bonuses and stock options, and you probably saw more resumes than sales orders and credit applications come over your fax machine. Calling this past year a year of transition is a giant understatement! But now that the bulk of the industry-wide downsizing is complete, what can we expect from 2003?

Expect more new home production, increased retail sales of new homes, more land development (or park to subdivision conversions) and the introduction of some new finance companies. No, it won’t happen over night, but all indications point to the New Year ushering in better times and greater stability into the manufactured housing sector. Will we ever see a market like the one we had in the 1990’s? No. Do we want one? NO. We as an industry dug ourselves a big hole in the last several years. Those methods of doing business are not the way you grow an industry. They don’t build goodwill with consumers or create a positive word-of-mouth “buzz” which results in repeat and referral business. Nevertheless, I think we have learned our lesson, and I am hopeful that our immediate future is bright.

What is your niche? At a recent luncheon attended primarily by retired manufactured home industry executives, many felt that one basic mistake we made in the 1990’s was trying to be all things to all people. We already had the first time buyer and recent retirees market well in hand. Then we decided to go after the mainstream homebuyer, competing head to head with site-builders. Perhaps it’s time to quit butting heads with the site-builders and get back to offering AFFORDABLE housing alternatives to consumers. After all, it is the basic premise on which our industry was founded. No one should be able to compete with our prices, and we should OWN the affordable housing market. “Newlyweds and nearly-deads” my dad used to say, “that’s who are customers are, kid.” If I were a retailer, park owner or manufacturer in 2003, I would determine what my niche was and be the best I could be in that niche. Small, inexpensive homes for first time homebuyers? Low maintenance, high quality homes for downsizing retirees? Communities offering amenities and services for the elderly or disabled? Duplexes? Assisted Living? What is your niche?

Efficient home production (while maintaining product quality), competitive pricing, controlled growth, stable lending, and prudent business practices will strengthen our business in 2003 and help to improve our image with consumers. Proposed legislation in 2003 to license salespeople will dramatically enhance both our credibility and professionalism in Oregon. The Manufactured Housing Institutes Lenders Best Practices certification will improve lending standards and attract new sources of financing into our business. Freddie Mac conforming interest rate financing for homes in rental parks with long term leases could also open new doors and create new sales opportunities. Overall, the New Year promises to be a year of moderate recovery and steady improvement.

As this year of downsizing and consolidation comes to an end, we eagerly await the challenges and opportunities that we will face in 2003. At Commonwealth we are committed to the manufactured housing industry and we will work hard to insure that next year is a great year for our clients and community residents.

Have a Happy New Year!

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