Mobile homes think outside the box

THE BALTIMORE SUN

Barbara Potter points proudly to some of the best features of her new home near Nashville, Tenn.: hardwood floors, high ceilings, a fireplace and a hot tub in the master bathroom. Even better, she managed to get all of that, and more, in 2,200 square feet bordered by a wraparound wooden deck for less than $90,000.

Best of all, she said, is the neighborhood: "no singlewides."

Potter, a retired medical assistant, and her husband, Ed, a meat cutter, live in a mobile home park. But the Potters' home, bought in 2000, doesn't fit the stereotype of the boxy trailer that haunts this segment of the housing industry.

Abuse has been heaped on mobile homes and the people who live in them for years: residents have long endured characterization as "trailer trash" for their economic circumstances, and the prefabricated structures' vulnerability in hurricanes and tornadoes has made them a staple of storm-disaster news coverage.

Although a lot of older mobile homes across the nation are showing their age badly, a new breed of upscale mobile homes has started making over the image of the trailer park. The Potters' home, for instance, sits in a park called Southshores that allows no singlewides, the narrow trailers of years past. Such rules have become more common in recent years as some parks try to go upscale and shake the old image of bottom-of-the-barrel housing.

The new era of fancier mobile homes has emerged in the wake of a sales slump. Shipments of manufactured houses - the industry's favored term to differentiate them from recreational motor homes - plummeted by more than 50 percent to about 170,000 in 2003 from 354,000 in 1997, according to the Freedonia Group, a consumer research firm in Cleveland. The drop was in large part caused by the low mortgage rates that have made conventional homes more affordable. As sales dropped, many mobile home makers have reassessed the market and redesigned their products.

Companies like Holiday Homes in Milford, Ohio, are taking aim at relatively affluent baby boomers who are either newly retired, or still working but downsizing their housing space because they are empty nesters. "This market is huge and you have to give them what they want," said Daniel Rolfes, the company's president.

They're driving up prices, too. Despite the drop in the number of mobile home sales since 1997, the average price is up 29 percent. That's largely attributed to the sale of larger and more luxurious products. The typical mobile home of 2005 is about 1,600 square feet, compared with 1,400 in 1997. All this raises costs, of course, and the price per square foot of a mobile home in the United States is more than $32 now, compared with $28 in 1997. But that's still far below the average $75 a square foot to build on site.

Another factor in the price rise is stricter construction and installation standards to make the buildings better able to withstand strong winds. But many of the extras are cosmetic, such as pitched roofs and faux brick exteriors. Even two-story mobile homes with staircases are appearing.

"The old box-style with a flat roof was dictated by the ability of manufacturers to move them down the production line," Rolfes said. "But now we're finding some consumers won't accept that, so we're adjusting our factories."

Robert N. West, president of the California Manufactured Housing Institute, a trade group, said the consumer in his state has a new standard. "They don't want the neighbors to be able to tell that their house is a factory-built," he said. Rick Boyd, a vice president of Clayton Homes in Maryville, Tenn., said his company's major sales potential is probably in its Oakwood Homes subsidiary, which offers manufactured houses in the $100,000 to $300,000 range. "The customer is looking for better carpet, upgraded countertops and real oak cabinets," he said.

Barbara Potter, the retiree from Nashville, would agree. "Our house doesn't look or feel like a mobile home in any way," she said. "We have a breakfast island in the kitchen and a high archway between the den and the dining room."

The sea change occurring in the mobile home market has caught the attention of the billionaire investor Warren E. Buffett, whose company, Berkshire Hathaway, acquired Clayton Homes for about $1.7 billion in 2003. Clayton, in turn, bought the Oakwood Homes Corp. for $373 million. Buffett could be getting into the mobile home market at just the right time; with mortgage rates now climbing, more customers may be attracted to relatively inexpensive manufactured housing.

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