Manufactured Homes Industry Works

To Reverse Negative Perceptions

KAREN OTT MAYER | The Daily News

Every once in a while, someone needs to set the record straight, and it appears the time has come for the manufactured housing industry.

Hurricane Katrina stirred much controversy over housing. The August 2005 storm also sparked debates about design and the fear of endless trailer parks. But almost two years have passed, and manufactured housing sales are still strong in North Mississippi and Tennessee.

"It's the quality of the product at an affordable price," said Jerry Bell, general manager of Freedom Homes. "People may still have the impression that these homes are like older models, but they're not."

Not trash, but treasure

A retail sales center in Como, Miss., Freedom Homes is part of Clayton Homes, the largest manufacturer and distributor of manufactured housing in the country and a subsidiary of Omaha-based Berkshire Hathaway Inc. Berkshire Hathaway is a Fortune 500 company controlled by business mogul Warren Buffett. The company's core business includes property and casualty insurance.

Manufactured housing models have come a long way since earlier days. With costs hovering at about $38 per square foot versus $78 for a traditional site-built home, buyers represent all walks of life.

"The people I see are those wanting to move out of DeSoto County or Memphis and who realize they could realistically buy a manufactured house and land for around $100,000," said Mark Rotenberry, sales consultant for Freedom Homes. "We're also selling to retirees who want to downsize or who don't want any more debt."

Chris Nicely, vice president of marketing for Freedom Homes, has been with the company 12 years and travels nationally.

"We see first-time home buyers, baby boomers and working families," Nicely said.

With 450 retail stores and about 1,400 independent business owners, Clayton also finances and insures homes. Nicely said the industry isn't as rate sensitive as traditional real estate markets. Instead, sales are affected more by employment numbers.

The company built 125,000 homes throughout the country in 2006, Nicely said, with Tennessee ranking among the top 10 for sales.

"Arkansas, Tennessee and Mississippi are generally strong sales areas," Nicely said.

While rural markets still are strong, Nicely said a new trend has emerged in the last five years, as cities are buying manufactured housing for infill projects.

The truth about quality

While misconceptions might still persist about the industry, the reality is that quality has improved.

"In the past 12 years, the evolution of this product is wonderful," Nicely said. "No longer are there special dimension building products. We use the same materials as builders."

Models include high ceilings, drywall, copper wiring (replacing aluminum) and stronger construction using 2-inch by 6-inch wooden framing. Nicely said there is a continual evolution in design and visual street appeal as roof pitches increase, mirroring more residential styles.

Another advantage is that construction takes at most a month, decreasing time that materials are exposed to weather.

For buyers like Jenny Willard, all of the above made her want to buy. When she considered moving to help her middle-aged parents, she looked into a manufactured home because it was a quick process, was affordable and would allow her to save for land. When she put her house up for sale, she said it sold quickly.

She even grew up in a 1967 model home.

"I said I don't want to move back into another manufactured house, but a friend said I should check them out," Willard said. "There is a total difference. Some models are nicer than a regular house."

Back to basics

Willard chose a Southern Energy model, which has sheetrock, and she both financed and insured her home through Clayton. The entire process took about a month.

"Mark (Rotenberry) was really helpful," Willard said. "I told him that we'd basically have two families living in the home, and he helped with a floor plan. We picked out the colors and that was it."

Nicely said the company always has been more conservative on the lending side than other companies and has been able to withstand the fluctuations in the market to continue to grow.

After Katrina, Clayton was the first to respond to the demand for housing.

"We provided about 4,500 homes total from September (2005) until February 2006," Nicely said. "Our pricing was aggressive so that people could afford homes. For many people, it was their first experience with manufactured housing."

While recent reports of the housing market are less than bright, Bell and his team seem to be heading in another direction and taking consumers with them.