Manufactured Housing - A Sound Financial Investment

manufacturedhousing.org - August 25, 2006
Do manufactured homes appreciate in value?

In general, manufactured homes will appreciate at the same market rate as other homes in the same neighborhood, but, as with all housing, it is subject to the same market factors that affect appreciation, including:
? the housing market in which the home is located;
? the community in which the home is located;
? the initial price paid for the home;
? the age and maintenance 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; and
? the extent of a 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.

Impact of Manufactured Housing on Property Values

For years many people have believed that manufactured homes, either on a scattered site or in communities, near or adjacent to site-built housing would depreciate the property values of the site-built housing. There is little evidence to support this notion, yet this belief has been used time and again to block manufactured home developments. In fact, all the recent studies on the subject have come to the conclusion that manufactured homes, either in communities or on individual lots, have no impact on the property values of adjacent site-built homes.

One of the first studies to tackle this issue was produced in 1986 by the Joint Center for Housing Studies of the Massachusetts Institute of Technology and Harvard University. In its analysis of a New Hampshire town without zoning restrictions for manufactured housing, the authors could find no statistically significant evidence that manufactured housing had any impact on adjacent site-built homes.

This conclusion was also supported by a 1993 study by the University of Michigan?s College of Architecture and Planning. In its examination of the impact of three Michigan manufactured home communities on adjacent residential property values, the authors stated: ??in all the cases we reviewed, the adjacent residential property values showed substantial rates of appreciation that were similar to the appreciation of comparable non-adjacent properties. We found that neither the private market nor local public officials differentiate between adjacent and non-adjacent properties when valuation levels are established.?

In 1997, the East Carolina University Department of Planning conducted the most extensive study to date on the topic. Using Geographical Information Systems (GIS) and spatial analysis, the authors analyzed the impact of both scattered manufactured housing and manufactured home communities on neighboring site-built homes in four North Carolina counties (Carteret, Henderson, Pitt and Wake). Even this extensive study came to the conclusion that the presence of manufactured home communities or individual manufactured homes had no impact on the property values of adjacent site-built residential properties