Selling 11 homes on the first business day of 2021 is quite an accomplishment. But many park owners are similarly having the highest level of demand in industry history. And we didn’t get those 11 sold in just one “hot” property but spread out about evenly across five states: Texas, Indiana, Illinois, Wisconsin and Kansas. So what’s with all the demand out there for mobile homes?
The “Great Reshuffling”
The pandemic and urban rioting has created a new dynamic in America in which those in the urban core are escaping to the suburbs and exurbs (the small towns just outside the traditional suburbs). Since most mobile home parks are located in suburbs and exurbs this means that the customers are literally running towards us and away from urban cores where there are virtually no mobile home parks. Zillow has coined the phrase “the Great Reshuffling” to describe this megatrend.
Social distancing and outdoor spaces
The pandemic has reminded people of how much they hate their apartment and how much they dream of a detached dwelling with a yard. With every health reminder that the only safe place is “outdoors” it’s easy to see why mobile home parks and their micro green spaces (yards) and macro green areas (common areas to walk) are hotly in demand. Having neighbors knocking on your walls and ceiling while you’re home all day in quarantine or at work on Zoom is no longer an attractive option, and that’s making apartment dwellers flock to mobile home parks like never before.
Stable neighbors you can trust – particularly when you’re home all the time
Apartments are filled with transient neighbors who view their time there as a stopover to a house – they have no skin-in-the-game at all. Those who own their own mobile home, on the other hand, have an estimated 14 year tenancy on average, and are a stakeholder in the property (they own the home and the park owner owns the land). There is great comfort -- and a support network – when your neighbors are in for the long haul.
The demand for affordable housing
OK, this is the biggest deal of all: housing prices in the U.S. are ridiculously high and the amount of affordable housing is very small and finite. The bottom line is that around 50% of Americans can’t actually afford to live where they do (based on the U.S. government assumption that no more than 33% of your income should go to housing). Mobile home parks, on the other hand, are the only truly affordable form of detached housing in America. Assuming that the average lot rent in the U.S. is around $280 per month, and roughly 80% of park residents own their home free and clear, that means that the majority of mobile home park residents have a three-bedroom house for around $1,000 per month less than a similar-sized apartment.
Great product at a great price
Finally, there’s the simple fact that today’s mobile home product looks nothing like the “trailer” of yesteryear. Modern mobile homes have the look and feel of elite apartment and new home construction, with layouts that do not suggest a simple rectangle. And since park owners can now buy factory direct, they are able to pass these savings on to customers at crazy low price-points. In most of our markets, the total price for our mobile homes – with vinyl siding and shingled roof – is less than half of the median home price, and around 80% less than the average for new home prices in the U.S.
It’s not really that amazing that we sold 11 homes on the first business day of 2021. The bigger question is why we don’t sell that many every day. Because the demand for mobile home parks in 2021 America is the highest in U.S. history and has every megatrend in complete alignment for long-term dominance.