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Lifestyles The diversity of today's manufactured home and the amenities available means that there is a home to meet practically any lifestyle. Homes range in size from 700 square feet to over 3,000 square feet. The cost of the average dual-section new manufactured home sold during 2004 was $98,447 without land. The price range of new manufactured homes sold without land during December of 2004 was $15,145 to $303,686. Single-Site Occupancy Many manufactured homes are indistinguishable from their site-built counterparts in construction and appearance. In California, approximately 70 percent of new manufactured homes sold are sited on lots in urban, suburban or rural neighborhoods. Facilitating this opportunity are state laws (Government Code Sections 65852.3 and 65852.4) which allow manufactured homes to be sited on any residential lots, providing the home meets local development standards. Also, covenants, conditions and restrictions adopted on or after January 1, 1988, cannot forbid the siting of a manufactured home on a residential lot, if the home can meet the same architectural standards as site-built homes in the neighborhood. (California Civil Code Section 714.5). Land-Lease Communities Many California home buyers site their new manufactures homes in planned developments where they typically own the home as personal property and lease a home site from a corporation or partnership responsible for maintaining community amenities and services, including security, clubhouses, pools, spas, and common areas. There are more than 4,900 manufactured housing communities in California offering a wide variety of lifestyles. Land lease fees in California vary by region but they generally range from $250 to $1500 per month.Features and Trends Subdivisions, Planned Developments and Condominiums A growing number of manufactured homes in California are being sold in conventional subdivisions, planned unit developments and condominiums where the land and home are owned and financed as real estate. Urban In-fill and Redevelopment Today's manufactured homes are growing in popularity with local governments and redevelopment agencies for urban in-fill and redevelopment projects. Manufactured housing is attractive for this use due to its cost effectiveness and the ability to design a home compatible with the local neighborhood that will fit any lot with relative ease. In trend-setting California, manufactured homes are available with stucco or wood siding; roofs of tile or composition shingles, and dramatic windows. Architectural styling include traditional Ranch, Cape Cod, Southwest and Mediterranean. Exteriors can be designed to be compatible with any local neighborhood. Interiors can be modest or luxurious. They can feature spacious living rooms with vaulted ceilings, formal dining rooms, kitchens with breakfast nooks, master suites with walk-in closets, dressing areas, and spacious bathrooms with garden tubs as well as stall showers. Manufactured homes are sold with major appliances, window coverings and carpeting in a choice of colors included in the price of the home. As California's land costs have increased, lot sizes have decreased. The resultant increased density has created a demand for floor plans with more square footage on smaller foot prints. In response, several manufacturers have developed two story models that once again advance manufactured housing's hallmark of architectural compatibility. In addition to being sold as real property homes, two story manufactured homes are being used to upgrade the housing stock in several land-lease communities in California. These homes are often financed as personal property. Long-term leases reduce the down payment requirements for families seeking high value affordability. Homeowner Demographics More than 1.4 million Californians live in nearly 645,000 manufactured homes. Manufactured housing is a significant portion of the California housing stock, representing about six percent of all new single-family homes sold each year. During 2004, over 61,000 California families purchased a new or existing manufactured home. A recent survey of California manufactured homeowners by Foremost Insurance Company revealed that 94 percent are satisfied with their homes and of these, 85 percent plan to remain in their manufactured homes or purchase another one. The typical head of the household is 65 years of age, is a high school graduate who attended some college and is either retired or employed full time in a technical/administrative or professional/managerial position. The profile of those who have purchased manufactured homes in the past decade demonstrates that significant changes are occurring in the characteristics of manufactured homeowners. Recent purchasers are younger, more affluent, have larger families, have attained a higher level of education and are less likely to be retired than manufactured homeowners as a whole. Most are siting their homes on private property as opposed to traditional land-lease communities. Industry Profile Manufacturers There are six CMHI member companies building manufactured homes in nine factories in California. Additionally, ten CMHI member factories ship homes into California from neighboring states. In 2004, 10,370 new manufactured homes were shipped in California, 7,608 of which were produced in the state. Manufacturing and retail sales of new manufactured homes contributed to over $1 billion to the California economy.
Retailers New manufactured homes are sold by licensed retailers. The California Manufactured Housing Institute, the industry's professional trade association since 1937, has nearly 100 members who specialize in the sale and resale of manufactured housing. These professionals must routinely complete certified continuing education programs. Retailers typically control the subcontracting functions related to installing the home on the lot of the homebuyer's choice. Some homes are sold from sales centers owned and operated by the retailer. Others are sold from a model center located in a land-lease community or subdivision. Many retailers will develop a custom manufactured home for a lot already owned by a consumer or help the prospective homeowner find a suitable lot. Some retailers specialize in the sale of existing manufactured homes. Since few manufactured homes are ever moved once delivered to an original foundation site, manufactured homes, even in land-lease communities, are sold on site and the space lease is transferred to the new homeowner. Sales of existing manufactured homes, assuming a 8 percent turnover, surpassed 52,000 in 2004.
Financial Institutions A number of California financial service companies and their branch offices have loan programs for manufactured homes. These institutions include banks, savings banks, credit unions, mortgage corporations and commercial finance companies. These companies provide all types of consumer, conventional and government-backed financing for manufactured homes. A common method of financing manufactured homes is through a personal property installment loan. This can be arranged through the retailer or by the homebuyer directly with the financial institution. Terms range from 15 to 30 years. Conventional real estate mortgages are also available for manufactured homes when they are affixed to real property via a permanent foundation and proper documentation. Manufactured homes are eligible for insurance under government backed programs offered by the Federal Housing Administration (FHA), the Veterans Administration (VA) and the Farm Home Loan Administration (FmHA). Further, the Federal Home Loan Mortgage Corporation and the Federal National Mortgage Association will buy loans backed by manufactured home real estate.
Why Manufactured Housing? Better Quality and Cost Control Increased reliance on factory production has resulted in major changes in the efficiency of housing construction. Builders today routinely use prefabricated wall panels, pre-hung doors, windows, pre-assembled stairs, roof trusses and cabinets. Advantages of factory construction include better control of building and financing costs, more efficient control of inventory and the ability to better control the quality and performance of products. Almost all California homes today include some factory-produced components.
Types of Factory Homes A key to understanding today's manufactured home is distinguishing it from other homes that are constructed in a factory. Most factory homes are comprised of three-dimensional modules. These modules are transported to a home site and installed on a state approved foundation or support system. California law clearly distinguishes among the types of factory-produced homes by the building code to which the home must comply. Manufactured homes are constructed to comply with the National Manufactured Home Construction and Safety Standards (24 CFR 3280), a uniform building standard administered and enforced by the U.S. Department of Housing and Urban Development. About 97 percent of all factory homes constructed in California each year meet this code. Factory-built homes, often called modular homes, are constructed to comply with the California Uniform Building Code, which is incorporated into law at Title 25, Chapter 3 of the California Administrative Code. Some factory-built homes employ panelized construction techniques. About three percent of all factory homes produced in California factories each year meet this code.
OUTLOOK 2005 The following prognostications come with all the normal caveats. Obviously, trends can take some unexpected changes in the economy and/or consumer preference. Here's what we see, barring significant changes in the economy and financing, for 2005:
Production/Shipments Production of new manufactured homes in California facilities should increase by 5% to 7,988 units up from 7,608 units in 2004. Shipments, including shipments into California from neighboring states, should reach 10,889 new homes, up 5% from 10,370 homes in 2004.
Manufactured Homes as Real Estate In 2004, 33% of the new manufactured homes sold in California were sited in subdivisions, planned unit developments and on scattered urban and rural lots where the land and home are owned and financed as real estate. The real estate trend for manufactured housing will continue and should represent 35 to 38% of new sales in 2005.
Urban In-fill and Redevelopment With the introduction of two-story homes and architecturally compatible exterior treatments, coupled with on-site enhancements such as attached garages, porches and decking, manufactured housing has become a viable and cost effective choice for local governments, redevelopment agencies and developers for urban in-fill and redevelopment projects. As the market niche is developed, bringing affordable housing to inner-city families, real estate sales of manufactures homes could reach 50% of total sales within three years.
Demographics The profile of those who have purchased manufactured homes in the past decade demonstrates that significant changes are occurring in the characteristics of manufactured homeowners. Recent purchasers are younger, more affluent, have larger families, have attained a higher level of education and are less likely to be retired than manufactured homeowners as a whole. Most are siting their homes on private property as opposed to traditional land-lease communities. We expect the average household size for new manufactured homes to be more in tune with the states average of 2.7 for single-family homes as opposed to the 1.9 persons for the existing manufactured housing stock.
Federal Standards & Factory Inspection All manufactured homes built since June 15, 1976, must conform to the National Manufactured Home Construction and Safety Standards, a national, uniform building code commonly called the "HUD Code." This code is administered by the U.S. Department of Housing and Urban Development. The HUD Code regulates home design and construction, durability, fire resistance, energy efficiency, and the installation and performance of heating, plumbing, air conditioning, thermal and electrical systems. The HUD Code mandates that each factory adopt an approved quality control program. This includes a system for testing and inspecting each home constructed. This inspection system covers review of the blueprint of the home and the construction of the home as it moves through the factory. The U.S. Government enforces the HUD Code through a contract with the National Conference of States on Building Codes and Standards. Third-party engineering companies perform in-plant inspections. A final inspection of the home occurs when the state or local government issues a mandatory certificate of occupancy, which is an inspection of the installation of the home. The construction of all manufactured homes is backed by a on-year written warranty.
About CMHI The California Manufactured Housing Institute (CMHI) is a private non-profit trade and professional association whose member companies build, sell, install and finance manufactured housing and develop manufactured housing communities. The Institute was founded to advance the availability and ownership of quality, high value homes, marketed by licensed retailers, by promoting the purchase of manufactured housing and the development of desirable sites and communities in California. The Institute's public, government and consumer relations are directed toward these goals. For more information about manufactured housing contact: California
Manufactured Housing Institute (909) 987-2599 www.cmhi.org Written
by: Jess Maxcy and Tony Hadley |
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