Do manufactured homes depreciate? No, they don’t.

April 29, 2019

Reality 1: Resale Value of Hames Pre-Owned Homes has Risen 34% in the Past 10 Years

In 2008, the average age of a used manufactured/mobile home sold was 12.8 years, and the average price was $29, 964.

In 2018, the average age of a used manufactured/mobile home sold was 18.6 years with an average price of $40,197.

Even though factory-built homes are aging, homebuyers understand that manufactured homes are the best housing value in America, and demand is going up[1].

Reality 2: Neither Manufactured/Mobile Homes nor Site-Built Homes “Depreciate”

“Depreciation” is an accounting term used to record a scheduled, federally-mandated expense related to a fixed asset.  Its only purpose is to determine the amount of income tax a company will pay and has nothing to do with the actual value, or lack thereof, for an asset.

If a manufactured/mobile home, condominium, or traditional site-built home is now priced more or less than the year before, it’s because either the location, condition or demand for the dwelling has changed.  Not because it has “appreciated”or “depreciated”.

Reality 3:  The New Home Premium

New manufactured homes and new site-built homes command higher prices than previously-lived-in dwellings.  According to Trulia.com[2], 46% of homebuyers are willing to pay a 20% premium for a NEWLY constructed single family home.  That doesn’t mean that site-built homes “depreciate” the year after they’re purchased!

Similarly, if a manufactured home is appraised at less than its model-year purchase price, that doesn’t mean it “depreciated”.  Homebuyers are just willing to pay more for a brand-new dwelling.

Reality 4: Location, Location, Location 

Unlike a motorized vehicle, the location of a manufactured home is a key price consideration.  For example: Several years ago, a family from a nearby, and less desirable, manufactured home community tried to sell their mobile home without success.  They moved their home to a Hames community (not an inexpensive procedure) and sold their home for $12,000 more than they were asking in the old mobile home park.

Hames communities are well-maintained with on-site managers.  This improves the livability of neighborhoods and value of residents’ homes.

Reality 5: Housing Snobs Jump to Conclusions about Manufactured Homes

The stigma of the decrepit “trailer park” continues in myth, folklore and country music.  In reality, today’s manufactured homes are spacious, comfortable, and constructed with the same building materials as traditional site-built homes.  They cost less because they’re built indoors in climate-controlled environments.

Let’s illustrate the extreme: There are 90 manufactured/mobile homes in Malibu, California that cost between $1.8 and $2.5 million ([3]).  I dare you to call them “trailers”.

Come and see the beauty and durability of a Hames mobile home for sale yourself.  Our knowledgeable sales people will show you why so many have chosen the manufactured housing lifestyle.  Call Clint or Curtis at (319) 377-4863, or contact us online. Financing is available for qualified buyers.



[1] Source: Hames Homes LLC historical sales data

[2] https://www.trulia.com/research/new-or-existing-home/

[3] https://www.marketwatch.com/story/itll-cost-you-25-million-to-live-in-this-mobile-home-in-a-trailer-park-in-california-2017-05-16-13883254



Commentary

George Allen
on 04/29/19
I agree with you. Quality HUD-Code manufactured homes well-maintained over the years, while sited in attractive, professionally managed land lease communities will indeed appreciate in value. Unfortunately, in too many local housing markets across the country, this two pronged scenario is the exception rather than the rule. I know of two very upscale communities (Baywood in Lewes, DE. & Saddlebrook Farms in Grayslake, IL.) where this plays out on a regular basis!


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