The state’s manufactured housing industry is churning along nicely after taking a body blow on sales during the recession. Although, it’s nowhere near its peak in the mid to late 1990s in terms of unit shipments to Michigan.
Bill Sheffer, executive director of the Michigan Manufactured Housing Association, attributed the increase in unit shipments — there are no production facilities in Michigan — to an improved economy and baby boomers downsizing from traditional single-family housing.
“When the economy got tighter, the alternative brought us to today, where we see this uptick in the sale of manufactured homes in the state,” Sheffer said. “That’s a great sign of the industry and its comeback providing affordable housing for Michigan residents.”
But the industry is still a far cry from its boom years, according to data from the Manufactured Housing Institute, a trade organization based in Washington, D.C.
In 1999, there were 12,545 manufactured home shipments to Michigan. Yet by 2010, there were just 325, a precipitous drop of 97.4 percent. In 2016 there were 3,866, more than two-thirds lower than the peak 19 years ago. Last year, Michigan had 4,791 manufactured home shipments, the fifth-highest in the nation, trailing only Texas (17,676), Alabama (6,046), Florida (5,855) and Louisiana (5,776).
As a whole, the industry has faced challenges competing with traditional single-family housing, which itself experienced an overall supply shortage, creating a seller’s market where buyers quickly pluck quality homes from the market.
In the early to mid 1980s, manufactured housing reliably represented approximately one-third of the overall home-sales share, ranging from about 29 to 37 percent of overall sales, according to the Manufactured Housing Institute. Yet, that number has hovered between 12 and 14 percent since 2008.
“It’s staying consistent over a pretty significant period of growth of MH starts,” said Bruce Thelen, senior vice president for Sun Communities Inc. (NYSE: SUI), a Southfield-based, publicly traded real estate investment trust that has about 350 manufactured housing communities with approximately 90,000 units across the U.S. Its manufactured housing portfolio revenue grew 17.9 percent from $834 million to $983 million between 2016 and last year.
Thelen said, in part, sales increased because since the recession the financial health of buyers has improved, and they are more able to buy. In 2017, the average sale price was $70,600 and there were 93,000 manufactured homes produced. Comparatively, the average cost of a single-family home was about $286,000 last year, making manufactured housing an attractive, affordable option for buyers, according to Sun.
But that doesn’t mean corners can be cut.
“Today’s consumer expects when they come into a house to see all the things they see on HGTV,” Thelen said. “They expect all the same features on any home they walk into.”