Is the manufactured home industry dying?

By Maureen Aylward

A recent study released by IBISWorld identifies 10 dying US industries. Among these top industries are manufactured home dealers. We asked Zintro experts in this field about their thoughts on this report and if they agree.

Pablo Fabbri, a real estate and construction professional, agrees that the manufactured home industry it is a dying sector due to many factors, such as:

  • changing and tightening regulation,
  • demonstrated weakness in severe weather conditions (tornados, hurricanes, 110km/h heavy winds),
  • faster depreciation,
  • loss of value,
  • increasing legal complications (tax reclassification), and
  • lack of financing (no loan policies by most banks and financial institutions except the US Agriculture Department).

“It seems to me that the sector must do some basic things, such as implementing various measures ranging from designing and building stronger homes, solving typical construction issues, marketing improvements, and adopting sustainable concepts,” says Fabbri. He also says that businesses in this sector must find a way to reduce operational costs in the life cycle, find a market specialization, and embrace overall quality and professional improvements in design, construction, and post-sale follow up.

Jim Carmichael, an expert in the manufactured home business, says that the industry lacks credibility in many areas and this must be addressed. “Manufacturers need a more uniform building code. And, retailers must have some level of accountability to lenders. Without chattel lending available, the manufactured home business is starting to fade away,” Carmichael explains. “Retailers and sales people must have some licensing authority so that if they are found to have violated sales/ lending rules, there is a course of action to fine them or revoke the license. I know this is a very unpopular opinion, but how else can the industry put confidence in lenders and the secondary market to have sellable paper?”

Kevin Connolly, a real estate attorney with expertise in construction and risk management, says that manufactured homes are more common than many suspect. “Some builders of luxury community developments pre-build substantial parts of the homes at centrally-located factories and ship them to the site to be assembled. This is not necessarily a bad thing. The work is uniform; it has to be in order to be interchangeable. It’s solid; it has to be to survive the rigors of cross-country shipment. And, it is high quality, because quality assurance at a factory is always easier than at a construction site,” Connolly points out.

But, Connolly says that builders must improve productivity and put an end to featherbedding and wastefulness that has for too long characterized the construction industry. “Builders have to move past the doctrine of building what the architect designed and move toward building what the customer needs and will pay for,” he says. “This is critically important and too often overlooked.”

By Maureen Aylward

What do you think?

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