'Luxurious' Mobile Homes?
The Wall Street Journal
By: June Fletcher
February 1, 2013
Q. My husband is retired and I am about to retire. To save money after we sell our house here, he is interested in moving into a luxury mobile home community in Florida. I have never lived in a mobile home and don't believe that they are that luxurious. What do you think?
A. It is true that mobile homes--the preferred industry term is "manufactured homes"--are much better designed and built and have more features than they did in the past. Some are quite roomy, with open floor plans, vaulted ceilings, upgraded cabinetry, faucets and fixtures, and exterior touches like porches and stucco exteriors that make them look more like a site-built home. Some manufactured home communities, particularly those targeted to seniors, also have amenities like clubhouses, swimming pools, spas, tennis courts and even dog parks.
Nevertheless, due primarily to the negative impressions many people have about so-called "trailer parks," the value of a manufactured home is less than a third of a comparable site-built home, even when variables such as neighborhood, structural characteristics and geography are controlled, according to an analysis published in the Journal of Real Estate Research. The same study showed that many people, including owners, thought that manufactured homes depreciated in value, even though they generally appreciate, albeit at a slower rate than site-built houses. According to the Census Bureau, in November the average sales price of a manufactured home was $62,200, compared with $60,200 a year earlier, a 3.2% increase. By comparison, during the same period, for site-built houses, average prices rose 16% for new homes and 8.1% for existing ones, according to the National Association of Home Builders.
So if you're just looking to buy a bargain and aren't fixated on appreciation, then a manufactured home community is certainly worthy of consideration. But there are a few caveats:
First, not all lenders will finance a used manufactured home and those that do charge higher rates than they do for traditional homes. That is partly because manufactured homes appeal to a less-affluent demographic that has a harder time paying when the economy goes sour. If you're buying in a new community, you may have to accept whatever rates are being offered by the developer.
Second, because manufactured homes cost less than traditional homes, it may be difficult to find a real-estate agent if you decide to sell, since the agent's commission will be lower.
And finally, costs for the lot and fees associated with the community's upkeep are often high, and can rival the cost of renting an apartment. Lots can be either bought or leased, depending on community rules; The Journal of Real Estate Research study found that appreciation was better for manufactured homes on owner-purchased lots. If you rent the lot, find out if there are escalation clauses and when they kick in. If you're priced out of the community and have to move your "mobile" home, it will cost you thousands to relocate it.
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