Improving resale market for preowned homes
By LEN BONIFIELD
Published July 8, 2006
When the Manufactured Housing Institute met earlier this year in California, one of the presenters was Dan Rinzema, president of Datacomp, a national manufactured home appraisal firm. His topic, of great interest to owners of manufactured housing, was "Revitalizing the Manufactured Home Resale Market." This column is based on his presentation.
Rinzema told audience members that they needed to spend time thinking about the industry's stepchild, the home in the resale market. "It may be our most important market," he said.
The resale market is critical to the industry's success. It is four to six times larger than the market for new homes and is seriously underserved. He told the audience that both the stick-built housing industry and the new automobile industry recognized long ago that to continue to grow their new sales, they needed to create a viable resale market. "If you can't sell your current house or car reasonably, easily and for a fair price, you certainly can't and won't buy a new one."
The resale market is larger than the new home market. The industry will probably sell fewer than 150,000 new manufactured homes this year. Some experts believe that between 350,000 and 600,000 preowned manufactured homes will be sold this year.
He described the lack of information about the manufactured-home resale markets. If you want to buy a resale site-built home, you can go to realtor.com and find detailed information on more than 2-million homes for sale. Every city in the country is served by a Multiple Listing Service. But the information in the manufactured housing market is spotty, fragmented or nonexistent.
Trained professional agents who sell manufactured homes are in short supply. Financing is not competitive for resale homes, and the "trailer" image refuses to go away. Low interest rates, down payment subsidies and a well-funded, well-organized site-built industry add up to stiff competition.
Rinzema offered possible solutions if the industry would rise to these challenges: Build an organized, accessible, information-rich resale marketplace; improve its image with industry-initiated standards and safeguards; and create customer value and loyalty with homes that build greater equity.
His five-step program:
* Make the buying and selling process easier, faster and more efficient.
* Give lenders confidence to approve more loans at lower rates and on better terms.
* Increase professional sale opportunities.
* Stabilize the market and home values.
* Improve the industry image, which would make it easier to compete.
One tool to make the resale market work already exists. MHVillage www.mhvillage.com is by far the largest and best Internet manufactured-housing marketplace available today. The MHVillage listing service is endorsed by MHI. MHVillage has more than 10,000 listings and averages 7,000 visitors daily. It contains information and photos for more than 17,000 communities. Free listings are offered to all members of MHI and state associations, along with very inexpensive listings for homeowners and others. It provides sales leads for industry professionals.
The newly created MH/LX listing service will allow professionals to share listings. Even though real estate agents have done this for years, until now less than 20 percent of manufactured-home brokers nationwide have been able or willing to co-broker homes. Now the infrastructure and tools are being developed to allow this to happen.
Finally, the industry must improve its image with better standards and safeguards. It needs to offer stability and protection that attract capital at lower rates. It must allow customers to buy with confidence, eliminate weak or marginal players, bring order to a disorganized market and attract trained professionals.
This presentation, along with other actions the industry is taking, is a positive step toward a viable resale market for manufactured homes. They could lead to a situation in which manufactured homes hold or increase their market value.
Send comments or questions to Len Bonifield at firstname.lastname@example.org or write him at 2914 Dollar Bonnet Lane, Lakeland, FL 33810. Please include your e-mail and mailing address. Because of the volume of mail, he can't respond personally to every query. Bonifield is a manufactured-home resident and a past HOA president and former officer of the FMO District 1 board of directors.