Industry Overview

According to the 2003 American Housing Survey, which was produced by the US Census, there are approximately 75 M detached housing units in the US. Approximately 9 M of these units or 12 percent of the total US housing stock is represented by manufactured homes. From 1959 thru 2004 the industry created some 12 M homes, of which over 75 percent are still in service.

The manufactured home land lease community has changed greatly over the past 45 years. The early communities, which are typified by high density home placements, single wide units, and low quality infrastructure improvements have evolved into low density communities with double-wide homes and good curb appeal. It is clear that the early trailer parks of the 1960's gave birth to a robust industry of affordable detached housing alternatives.

The evolution of the manufactured home and the manufactured home land lease community into a higher quality housing option has meant increases in the average price of homes. In December, 2004 approximatley 9,400 manufactured homes were shipped with an average sales price of $59,600. This compares with an average price of $19,800 in 1981, meaning that manufactured home prices have
tripled over the past 25 years.

This has resulted in problems in the industry as the manufactured home has converged with the affordable stick built or traditional production built home. The last several years have seen unprecedently low interest rates, which has resulted in high affordability opportunites for stick built home buyers. On the converse financing for manufactured homes can be expensive. These pressures have resulted in record low shipments of new manufactured homes over the past few years and the future outlook remains cloudy.

In the face of these trends manufacuted housing or mobile homes remain a viable affordable housing alternative in the US and existing communities continue to serve this base of demand. We believe that challenges and shifts in any industry breed opportunites for investors. We exclusively serve buyers and sellers of manufactured home communites in our target markets.

Rich Correll
Principal
Correll Commercial RE Services