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By Or Michaelo, CEO and co-founder of Orbit Homes

The average U.S. home now sells for more than $500,000 in 11 metro areas. For example, the San Diego area recently surpassed San Francisco on an affordability index, when in January of 2022 the median home price in San Diego rose to $764,000. The report from research firm OJO Labs noted low supply and incomes not keeping pace with prices as reasons for the affordability issues and skyrocketing prices. Nationwide, prices rose an astonishing 19.2% in the past 12 months (April to April). The market’s rise continues due to low rates (especially in 2021 and early 2022), limited inventory, and very little buildable land that’s close to major metro areas. Combating the affordability crisis is a major concern for city governments. One potential solution is an overlooked housing segment—manufactured homes.

The Appeal of Manufactured Housing

Modern manufactured homes present an opportunity for various stakeholders. It gives community members a safe and well-appointed home in expensive areas and is an efficient way to add more housing stock. There’s a considerable cost benefit to these types of homes. For example, Orbit Homes, a provider of luxury-finished manufactured homes, offers models such as the Moon, which cost approximately $265,000. This means someone can purchase the model with roughly $50,000 as a 20 percent down payment, compared to $150,000 for a typical $750,000 home. The model costs around $1,000 to $1,500 a month depending on if the occupant also owns the land. It’s land ownership that’s a key part of this metric and pricing. 

The Changing of “Park” Communities

Contemporary manufactured homes offer luxury appointments and materials. These stand out from the generic and stale designs of traditional park communities, which are what many people envision when they hear “manufactured housing.” 

These homes offer open floorplans to make them feel more spacious and welcoming, as well as sliding doors in every room that let in light and fresh air. Many also include outdoor deck spaces to give owners a residential feeling and additional space for entertaining guests. The manufactured homes from providers like Orbit Homes come with fixtures, appliances, electrical, and plumbing pre-installed prior to delivery. This ensures quality control, speeds the process, and provides owners with a unit that has a polished seamless look. 

Alleviating the Housing Crisis

According to statistics from Pew Research, in 2020 46% of renters spent 30% or more on their housing costs, and 23% spent more than 50%. The Department of Housing and Urban Development notes these people fall into the “cost burdened” category. Spending most of one’s income on housing is commonplace in high-cost areas like California, which puts significant strains on mid and lower-income families to enjoy the long-term security and potential gains of a home purchase. 

Manufactured homes present an opportunity to expand housing supply at more affordable pricing, and reduce the housing crisis throughout many areas in the U.S. These units can serve as primary residences on private land, providing owners with a cost-effective way to create housing stock. They’re also suited as accessory dwelling units (ADU’s), a type of structure encouraged by some municipalities to combat the housing crisis. 

In California, quality manufactured housing units are changing the ways people think about park communities. These units provide homebuyers living in expensive locales with a way to stay in the community in an affordable and quality space. These homes feature attractive financing options and the ability to customize the finishes of the homes. Buyers also gain the benefit of the communities’ shared amenities such as tennis courts, pools, and recreation centers. It’s a shifting dynamic that’s presenting people with a new way to live in a close-knit, safe, and aesthetically pleasing community. 

Ditching the Sticks

With the improvements in manufactured home build quality, finishes, and options, some developers are rethinking choosing stick-built homes. Manufactured homes are more efficient to build, taking an average of six weeks to complete, a timeline that includes all the electrical, plumbing, and appliance installation. There’s also an environmental advantage to manufactured homes built in a factory where the builder can control materials waste. They only require a foundation and electrical and water hookups. Additional sustainability benefits of manufactured homes compared to stick-built include:

  • Usage of standardized processes to eliminate waste
  • Bulk materials purchasing reduces transportation-related emissions and impacts
  • Manufactured homes sit on smaller lots than stick-built homes, resulting in less water-intensive landscaping and maintenance emissions
  • Single-family home construction is very inefficient and produces thousands of pounds of waste per home

In high-cost areas like San Francisco and San Diego, long-time homeowners reap the benefits of their accumulated home equity. This offers them the chance to sell and relocate to a cheaper area, or utilize their equity for college, home improvements, or other uses. New owners jumping into a frothy market don’t have these advantages, and risk prices leveling in the coming years. Manufactured homes provide opportunity for non-owners to enjoy home ownership that’s considerably cheaper that also gives them appreciation potential and their own “American Dream.”

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