Mastering Real Estate & Note Investing

Hurricane victims emerging from ravaged trailer parks are discovering that the U.S. mobile-home market has left them behind. In Florida and Texas, dealerships are swarmed by buyers looking to rebuild their lives after hurricanes Harvey and Irma, but many leave disappointed.

The industry, led by Warren Buffett’s Clayton Homes Inc., is peddling such pricey interior-designer touches as breakfast bars and his-and-her bathroom sinks. These extras, plus manufacturers’ increased costs for labor and materials, have pushed average prices for new double-wides up more than 20 percent in five years, putting them out of reach for many of the newly homeless. 

About 22 million Americans live in “manufactured homes,” a classification that dates back to 1976, when federal law set standards for what used to be called mobile homes. Sales of new units are growing 15 percent annually as the base of buyers expands from rural areas to suburbs and retirement enclaves. Tile backsplashes and kitchen pantries fatten profits and attract buyers who couldn’t afford similar extravagances in conventional houses. The industry, which makes 80 percent of new homes that sell for less than $150,000, was struggling to keep up with demand even before the hurricanes. Manufacturers that closed plants after the housing crash say they’re having difficulty adding capacity because of a shortage of skilled labor. Dealerships such as LeeCorp, among the biggest in Southwest Florida, have backlogs as long as six months. 

READ MORE: https://www.bloomberg.com/news/features/2017-11-21/mobile-homes-are-so-expensive-now-hurricane-victims-can-t-afford-them

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