Why the Mobile Home Business Works and the Manufactured Home Business Doesn’t

When I got into the mobile home park business, many of the sellers I bought from called mobile homes “coaches” and “trailers.” Roger Miller even wrote a hit song with the lyric “trailers for sale or rent”. But the manufacturers and distributors thought the business needed an update, so they changed the name to “mobile home.” Of course, the name was misleading, because RVs are far from mobile. Some can’t survive any move at all, and moving one can cost $3,000 or more. And I guess they put the word “house” in there to make it sound reassuring or folksy (instead of saying “mobile unit”), or to give you more direction on what you were supposed to do with the thing. But I accepted the new nickname, just like everyone else.

The mobile home is a good symbol of affordable housing. It represents the collective efforts of manufacturers and the government to build the cheapest single-family housing unit in the world. Although not always attractive to the eye and has been a notorious incubator for some of humanity’s wilder living conditions, it is cheap. Sometimes very cheap. I’ve seen used RVs sell for $1,000, that’s 94 cents a square foot. That’s about 100 times cheaper than a comparable stick-built house.

The mobile homes were inhabited by people who didn’t earn much, but at least they were inhabited. No one expected much more than four walls and a roof, and they were rarely disappointed. If he didn’t have a lot of money, he always felt sure there would be a mobile home in a park to fit any budget.

But then, in the 1990s, they decided to reinvent the industry again, this time under the name “manufactured home.” Out with the concept of “mobile” and in with the concept of building something in a factory. First of all, I’m not so sure you want to hit the client with the idea that his housing unit was built in a factory. That’s not exactly a crowd pleaser or a reason to brag at a “my house was built like my car” cocktail party. Most things built in a factory are impersonal, cheap, and often prone to breaking. Wait a minute, maybe that’s a pretty accurate impression.

With the new “fancy” name came new home prices: roughly two to three times what mobile homes cost. But they still sold well due to the incredibly low standards of lenders like Greentree. Suddenly, mobile homes that used to cost $10,000 now cost $40,000 as manufactured homes. And therein lies the problem.

Manufactured housing has lost its roots as affordable housing. Now you want to pretend it’s something more than what it is and get the consumer to join in on the fun. I think the American public has voted with their wallet. Manufactured home sales have fallen 75% since the year 2000. The sad truth is that no one wants an expensive manufactured home. They want cheap mobile homes.

There is talk that the industry wants to change the name again. Perhaps “executive mansions on the go” is on the table. I urge the industry instead to get back into the “mobile home business.” They all knew what it meant, affordable housing, and they could afford it. Homes sold quickly and parks were full. That demand hasn’t gone anywhere, but no one can afford, or wants to buy, $40,000 affordable housing. Instead of scrambling to figure out how to build and sell the most expensive manufactured home, let’s refocus the industry on how to build the most expensive manufactured home. at least expensive. I know it’s not that profitable, but you can make up for it in volume.

“Coaches”, “trailers” and “caravans” are where the demand is. “Prefabricated houses”? Nobody is interested. And forget about any new names, you’ve embarrassed yourself enough.