Gary and Debbie Halvin found an affordable solution 20 years ago when they bought an empty lot in Ralston at a tax auction for $7,100 and installed a $68,000 house manufactured by BonnaVilla Homes of Aurora, Nebraska.
“There was some opposition,” said Gary, now retired from packing plants and other Omaha businesses. “They didn’t want any manufactured homes in Ralston.”
But after some study and seeing the details of the Halvins’ plans, city officials gave the OK. With two 16-foot-wide sections, a full basement, a two-car garage and landscaping that fits the neighborhood, their home on Seymour Street ended up grander than the usual manufactured home at the time.
This spring, the Halvins got a notice that affirms their residential decision and negates the myth that all manufactured homes decline in value: Their home’s tax value rose to $163,700 from $126,300, now more than double their original cost.
Yes, manufactured homes — and their less-movable factory-built cousins, modular homes — gain value if everything’s just right. That’s why Kevin Clayton says manufactured homes should not be treated as personal property, like automobiles or campers.
“If a manufactured home meets certain aesthetic characteristics (a high-pitched roof, a garage, a porch, some masonry on the front, for example) ... we think that it should be financed, zoned and appraised like any other traditional home,” said Clayton, the CEO of Clayton Homes, a division of Berkshire Hathaway Inc. based in Maryville, Tennessee.
Gaining value is important for the growing number of people for whom the prices of site-built homes are “completely out of reach,” he said. Value appreciation is a vital part of home ownership, and factory-built homes give more people a chance to buy houses in the first place.
But manufactured homes can depreciate, said Eric Westermeyer, editor of Manufactured Housing magazine, an industry publication. Although both are built in factories and trucked to home sites, manufactured homes have steel chassis and can be moved, while modular homes are made to be permanently attached to foundations.
“Generally speaking, (manufactured) homes tend to depreciate over time, but there are exceptions to that,” Westermeyer said.
Last month Fannie Mae, the federal agency that oversees the mortgage industry, announced a new cost-saving mortgage option called MH Advantage for manufactured homes with pitched roofs and other features that Clayton describes. The idea is to provide more affordable starter homes, the agency said.
Still, Tracy Day, sales manager for Champion Home Builders, which makes manufactured and modular homes in York, Nebraska, says flatly, “It doesn’t make any difference what type of structure that it is.” A home’s future value is “really related to the property it sits on,” not whether the guy pounding the nails is outside in the weather or inside a factory.
For housing-strapped rural and small communities like Aurora, Nebraska, factory-made houses are alternatives to site-built homes that require, among other things, skilled workers who are hard to find in the countryside. Last year civic leaders in Aurora installed a mini-neighborhood of factory-built homes, five on each side of a newly developed block.
“They’ve got nice curb appeal to them,” said Wade Regier, president of the nonprofit Aurora Development Corp. and the local Pinnacle Bank market. “It doesn’t look like low-income housing.”
The project has modular homes rather than manufactured homes, he said, because it’s easier to get conventional financing. Most investors who buy mortgage-backed securities don’t want manufactured homes as collateral.
Benjamin Hynek of Lincoln, a property appraiser and chairman of Nebraska’s Real Property Appraiser Board, said modular homes appraise closer to site-built homes, but manufactured homes are viewed as movable and “are a different type of property,” even if they are attached to foundations.
It can be tricky to appraise a manufactured home because there usually are few sales of comparable homes nearby as a guideline, he said.
“There’s not a standard adjustment or a way to compare a manufactured home to a normal stick-built, site-built house,” Hynek said. “The market notices the difference between those, and it’s significant. ... You might call the bank and say, ‘This is a manufactured house.’ And they’ll say, ‘Whoa, hold up. We have a totally different process.’ ”
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PARTING THOUGHTS: What are your thoughts? Here at The McAnuff Group we have seen time and time again manufactured homes, and even older mobile homes, especially if well maintained and even renovated, increase in value. The key is in how well they are cared for.