The Manufactured Home Market Heats Up

The Manufactured Home Market Heats Up

A perfect storm of events continues to help the manufactured homes sector grab market share from the more conventional stick built homes. Increased construction costs, energy sector job creation – combined with a rapidly retiring baby boomer population has helped to dramatically increase the population in many of today’s manufactured home communities. Making this specific sector within the real estate market an attractive investment for the likes  Marcus & Millichap.

Providing further evidence that manufactured homes and the communities in which they reside are now an attractive investment model for the average corporate portfolio; Capital Square Realty Advisors announced in early September it had purchased a group of three manufactured housing communities – representing a total of over 1,100 units in Indiana and Ohio. This trailer park take over is only the most recent in a series of modular home communities being purchased by mega-wealthy investors. Case and point, many were stunned by the recent acquisition by Sun Communities’ of the American Land Lease portfolio for a respectable $1.32-billion.

According to Louis Rogers, founder and CEO of Glen Allen, VA-based Capital Square “Manufactured housing communities are an attractive investment opportunity, with increasing demand and a tight market given barriers to new construction across much of the U.S.,” continuing to explain Mr. Rogers noted, “There are a number of Americans that are either searching for a manufactured vacation home, or are seeking a new housing opportunity as traditional homeownership becomes economically unfeasible for a growing percentage of the population. Today, manufactured housing offers an affordable and high quality alternative.”

Providing further context for these investments, Marcus & Millichap have been reporting that those areas of the energy boom region like the Barnett Shale region, Western Pennsylvania, North Dakota, Eastern Ohio as well as Texas all suffer from insufficient housing options, which has sent new demand for manufactured homes into the stratosphere. Additionally, as the economy continues to improve and the aging baby boomer populace continues to retire, more people intend on purchasing a vacation home, while others are hoping to get out and move to a warmer climate.

As of May 2014, the report claims, new manufactured home placements in the US have climbed 4.4% year over year, with 70% of the total placed in the Southern region.

Let’s take a brief look at some of the players in the industry who will benefit from the recent buying spree of manufactured home communities, as tours the Las Vegas Manufactured Home convention.

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