Do Mobile Homes Decrease in Value?
Do mobile homes decrease in value?
Posted by Paul Kaplan on Wednesday, April 10th, 2019 at 2:48pm
Mobile Homes and Manufactured homes get a bad rap. Sometimes justified, but often not. Yes, there are some ugly and rough neighborhoods with mobile homes all over our country, but the same is true for some areas with “regular” homes. We encourage you to ignore the stereotypes and look at facts. Whether in Palm Springs or other areas, we suggest you check out the neighborhood before making that call- we did.
One of most common myths we hear is that mobile homes DEPRECIATE in value. Quite the opposite can be true. Recent data challenges the idea that manufactured housing isn’t a strong investment.
[NOTE: We are not a finance professionals nor are we a licensed appraiser. We don't have a crystal ball and cannot guarantee that a manufactured home will appreciate, nor can we guarantee a stick built home or condo can. There are too many variables in play. We simply want to make sure you have the correct information available to you and that the biggest myth regarding manufactured homes is put to rest.]
When we opened the new homes sales office at thePalm Canyon Mobile Club in 2017, in south Palm Springs, we did some background research regarding this neighborhood's values. We wanted to compare prices for the last decade, of neighboring condos and single family homes. We've updated our research, and here's what we discovered using public data provided by our local Multiple Listing Service, based on sold properties per year in 2009 compared to 2018. In the south Palm Springs neighborhood over the past decade, home prices have actually risen at a faster clip for manufactured, or mobile homes than they have for traditional properties.
1. Mobile Home & Manufactured Home average prices increased 95% from 2009 to 2018.
2. Mobile Home & Manufactured Home average prices increased 28% more than single family homes in the same neighborhood of south Palm Springs.
3. Mobile Home & Manufactured Home average prices increased 46% more than condos and townhomes in the same neighborhood of south Palm Springs
Here are the numbers at a glance:
|property type||average price/square foot*||average price of home*||% increase from 2009 to 2018*|
|2009||MH||$ 42.71||$ 53,047.00|
|2018||MH||$ 112.11||$ 103,246.00||95%|
|2009||SF||$ 204.42||$ 504,158.00|
|2018||SF||$ 347.99||$ 843,808.00||67%|
|2009||Condo||$ 141.54||$ 191,869.00|
|2018||Condo||$ 203.22||$ 285,281.00||49%|
|*Information from The MLS and VESTAPLUS™ for MLS area, 334, South Palm Springs, 92264. Broker/Agent does not guarantee the accuracy of the information provided by VESTAPLUS™ Copyright © 2019 by The MLS™. Information deemed reliable but not guaranteed.|
Our further research has turned up the following info: Datacomp, the nation’s largest provider of manufactured and mobile home value reports, price information, & appraisal reports, found that there are specific reasons why some homes appreciate while other depreciate. These reasons include:
- The housing market in which the home is located, will have a significant impact on the future value of the home.
- The community in which the home is located, has a similarly significant impact on the home's future value.
- The initial price paid for the home.
- The age of the home.
- The inflation rate.
- The availability and cost of community sites, which reflects the supply and demand influences on the home's value.
- The extent of an organized resale network, where an organized network will usually result in homes selling for a higher price than in markets without such an organized network
In conclusion, it appears that the appreciation in value of manufactured homes comes back to the old real estate axiom -- location, location, location. When properly sited and maintained, manufactured homes may indeed appreciate. And in the above example, Mobile Homes and Manufactured Home values in the south Palm Springs area, have increased even more compared to other traditional homes in surrounding neighborhoods.