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Manufactured Housing Market Sees Downturn
Posted Thursday, October 9, 2008 ; 06:00 AM | View Comments | Post Comment
Updated Thursday, October 9, 2008; 08:45 AM

While the current economic downturn has been bad for the housing market in general, it may present an opportunity for factory-built homes.

By Pam Kasey
Email | Bio | Other Stories by Pam Kasey

While the current economic downturn has been bad for the housing market in general, it may present an opportunity for factory-built homes.

"The main thing is affordability," said Steve Brown, president of Hurricane-based The Home Show. "You can get into a home with payments as low as $250 a month on some single sections. You can't rent for that."

Sales in the factory-built industry have been declining in West Virginia, but it's not due entirely to the economy.

It's a decline that began years ago both in the state and nationwide.

"This is not just as a result of this housing crisis or the mortgage crisis," said West Virginia Housing Institute Executive Director Andy Gallagher. "It's been a long-standing, slow slide for the industry starting six years ago."

The numbers show the slide beginning even before that.

Shipments to West Virginia of manufactured homes -- a subset of the factory-built industry -- peaked in 1995 at 4,700 units according to the U.S. Census Bureau. In 2007, that number dropped to 1,833 units, and that number is expected to be lower this year.

Shipments nationwide have been on a similar decline since 1998.

While the industry at one time claimed 60 percent of housing starts in West Virginia, Gallagher said that number is now under 40 percent.

The Home Show, with 11 sales sites in West Virginia and eastern Kentucky, is the largest player in the state.

Home Show houses range from the high $30,000s for a single-wide manufactured home to $185,000 for a two-story, 3,000-square foot modular home with a two-car garage, according to Brown.

It all depends on the buyer's choices.

"You can have brick foundations, crawl spaces, higher roof pitches, Jacuzzi tubs, stainless steel or black appliance packages, hardwood flooring, tile," Brown said. "The only difference between a site-built house and a manufactured or modular house is that, where the house is 'bumped together'" -- the "marriage wall" of a factory-built house assembled on-site --"the wall will be twice as thick."

Turnaround is quick, too.

A customer who has a cleared lot and orders a model that's ready to ship can move in to the property in as little as two weeks, Brown said.

A typical timeline, weather permitting, is up to eight weeks.

Most of The Home Show's manufactured homes are built in plants around Knoxville, Tenn., Brown said. Others are built in Virginia, North Carolina, Pennsylvania and Ohio.

There are no manufacturing plants in West Virginia. Brown thinks that's because the manufacturers -- companies such as Clayton Homes and Fleetwood Homes -- have been put off by the state's tax structure and problems with workers' compensation.

With the affordability and quick timelines of factory-built homes, Brown said, "This industry should be doing much better than where we are today."

He feels that the industry suffers from an image problem.

"This used to be the old trailer business," Brown said. "People don't aspire to live in a single-wide in a trailer park. I think that image has hurt this industry for many years."

Gallagher agrees.

"When the economy was going pretty good over the past few years, I think people were looking at what they considered a higher quality stick-built house," Gallagher said.

He said factory-built homes are good for first-time homeowners as well as for older people who want to get out from under a heavy mortgage and into a one-level home.

Manufactured homes have changed over the years and are a good value, according to Brown.

"If people take care of their manufactured house ... it will appraise just like site-built houses," he said.

Brown, who also is co-president of the WVHI, would like to see the industry take advantage of the economic slump to promote the advantages of manufactured and modular homes.

He is working with the national Manufactured Housing Institute to establish a per-floor charge to fund a nationwide advertising campaign that may begin next spring.

The Home Show is promoting itself by mailing invitations this week across the state to draw people into demonstration homes.

"Once they're in our product they're absolutely overwhelmed with how beautiful it is," Brown said. "Customers will see that this is a great alternative to site-built product."

Copyright 2010 West Virginia Media. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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