ROANOKE TIMES
Copyright (c) 1997, Roanoke Times
DATE: Monday, March 31, 1997 TAG: 9704010005
SECTION: MONEY PAGE: 6 EDITION: METRO
DATELINE: NEW YORK
SOURCE: JANE BRYANT QUINN WASHINGTON POST WRITERS GROUP
Comfort and affordability draw buyers to manufactured housing
When the newspapers talk about strong housing sales, they're reporting on traditional homes. In the 12 months ending in January, sales of existing homes rose a confident 5.9 percent.
But for even higher figures, look at what's happening to the nation's most affordable housing: mobile homes, aka manufactured homes. Sales last year jumped 7 percent. Social and demographic trends suggest that you're going to see more manufactured homes in the neighborhood.
The average single unit sold for $26,700 in 1995, according to the industry's most recent survey. The average double-wide sold for $45,900. Typical setup costs - for utility hookups, a concrete pad, the driveway and so on - come to $1,000 to $2,000.
In a mobile home park, you pay monthly rent for the land beneath your home. Alternatively, you might own the land yourself. In either case, you'll pay a lot less than the $120,500 average for traditional homes today.
The low price for mobile homes appeals not only to first-home buyers with moderate incomes - the traditional market. These homes also look good to divorced parents who no longer can afford conventional housing, and to the growing market of retirees.
The industry says it's pushing into the white-collar family market, too. Partly, that's because mobile homes are getting better looking, especially the pricier models.
They're also available in units of various sizes, not just double-wides. Assembled on site, perhaps with a basement below, they can be indistinguishable from some traditional homes.
Many communities, especially in the North, zone out mobile homes because they don't like the way they look. But ``a lot of states have passed legislation to make it more difficult for localities to completely eliminate the homes,'' says William Apgar, head of Harvard's Joint Center for Housing Studies.
He cites California, Oregon and Washington state as especially active on behalf of manufactured housing.
Joe Campbell, vice president of Mod-U-Kraf Homes Inc. of Rocky Mount, said the homes it manufactures meet building codes in all of the eight states in which it sells. He said his manufacturing company has heard of no zoning problems encountered by its builders.
For many cities, the key appears to be whether the unit is affixed to the site. Seattle, for example, designates manufactured homes as acceptable single-family residences if they meet certain quality standards and local building codes, and are placed on permanent foundations.
The Manufactured Housing Institute in Arlington, Va., the industry's trade association, is hoping to enter downtown neighborhoods through what it calls ``urban infill.''
It's expensive to build affordable center-city housing or rehabilitate groups of rundown homes, said Joe Owens, the institute's vice president of finance. There's a big risk of theft if building materials are left at the site, he adds.
Manufactured homes, however, can be built on a vacant lot in a day. Experiments in urban infill are under way in the Pittsburgh area; Denver; Birmingham, Ala.; Louisville, Ky., Milwaukee; and Washington, D.C.
Parks can be pleasant places to live, with swimming pools and good landscaping. But renters should check out the lease and talk to several other people who live there. You want to know how fast rents go up, whether there's a community association, and whether you have to buy services such as heating oil through the park, at a markup in price.
New manufactured homes, not affixed to foundations, are generally financed on installment-sale contracts, said Richard Faulk, president of the manufactured housing division of the Independent National Mortgage Corp. in San Diego. Current interest rates are in the 10 percent to 11 percent range for a 20- to 30-year term. Down payments run 5 percent to 10 percent with minimal up-front costs.
If the home is affixed to the property, however, buyers can get a regular mortgage. Current rates are about 9 percent to 10 percent for a 30-year loan.
Mobile homes tend to depreciate in value, unlike conventional housing, which generally gains. But that rule may not be true of fancy mobile units, in good locations, that are well kept. However, investment isn't the attraction. The market for mobile homes is growing because they're affordable, comfortable places to live.
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