Manufactured Homes Do NOT Depreciate. Here’s the proof.
May 31, 2022
The value of a manufactured home, mobile home, or any home for that matter, depends on condition, location, and demand.
There’s an urban myth that mobile and manufactured homes depreciate like cars. Here are the realities:
Reality 1: Mobile Home Values Are Rising Faster Than Single-Family Home Values
According to lendingtree.com, the median value of mobile homes increased by 39% from 2014 to 2019, which is 6 percentage points more than the 33% increase in the median value of a single-family home in the same period.[i]
At Hames Homes:
· In 2008, the average age of a used manufactured/mobile home sold was 12.8 years. Meanwhile, the average price was $29, 964.
· In 2021, the average age of a used manufactured/mobile home sold was 22.1 years with an average price of $51,133. That’s a 71% increase!
Even though factory-built homes are aging, homebuyers understand that manufactured homes are the best housing value in America. Demand is increasing, which keeps home values high.[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, of 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 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 pre-owned 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 any home “depreciates” the year after it is 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 key price consideration. For example: several years ago, a family from a nearby, and less desirable, manufactured home community tried to sell their home without success. They moved their manufactured 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 desirability of neighborhoods which supports the 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.
Come and see the beauty and durability of a Hames manufactured home for yourself. Our knowledgeable salespeople 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.[ii]
[1] Source: Hames Homes LLC historical sales data
[2] https://www.trulia.com/research/new-or-existing-home/
[i] https://www.lendingtree.com/home/mortgage/mobile-home-values-study/
[ii] Through Circle Finance LLC NMLS #366020