"Granite Islands And Backsplashes": Even Doublewide Trailers Are No Longer "Affordable"

Tyler Durden's picture

Since the early 1900s, millions of Americans have relied on trailers as a source of no-frills, affordable housing.  In fact, roughly 22 million Americans live in trailer parks today, but the industry is hardly the stable source of affordable housing that it used to be...a lesson that 73-year-old Judy Goff of Naples, Florida recently discovered the hard way after Hurricane Irma ripped through her park and destroyed her home, along with roughly 1.8 million others.

As Bloomberg points out, when Goff went to a local LeeCorp dealer lot to replace her $46,000, 1,200 square foot trailer with something of similar size and value, what she found instead was "manufactured homes" stuffed with high-end upgrades like granite counter-tops and vaulted ceilings that rendered them too expensive for her $23,000 per year of income.

Last month, Judy Goff, a 73-year-old hardware store clerk whose double-wide in Naples, Fla., was blown to bits, pulled into a LeeCorp Homes Inc. sales lot and wandered through models with kitchen islands and vaulted ceilings. In the salesman’s office, she got the total price, including a carport, taxes, and removal of her destroyed trailer: $140,000. “I don’t have that kind of money,” said Goff as she stood amid the wreckage of her old home, whose walls and ceiling were stripped away, leaving her leather furniture and a lifetime of possessions to bake in the sun. “That was all I had.”

 

Goff—who just wants to replace the wrecked 1,200-square-foot trailer that she bought 17 years ago for $46,000, including the cost of land—says she feels boxed in. Her mobile-home community won’t allow single-wide homes or older used models as replacements. And every home must have a carport. She’s willing to give up such upgrades as the higher-end countertops, but that probably won’t be enough. Between her Social Security check and income from her job at Ace Hardware Corp., she earns only about $23,000 a year. “I just want a home that’s equal to what I had,” she says. “My home was a beauty.”

 

“I get that higher-end countertops and kitchen islands are where the better margins are, but that’s also going to put homes out of reach for a lot of buyers,” says Doug Ryan, director of affordable homeownership at the Washington nonprofit Prosperity Now. “The storm is revealing a whole lot of problems in the low-cost housing market.”

Meanwhile, as we note frequently, while the cost of manufactured homes has surged, the pay for the bottom fifth of American wage earners has been somewhat stagnant for nearly two decades now. Even after a modest uptick recently, the bottom 20% of households have seen their income fall 9% since 2000, in real terms.

But, as low-income households have found it increasingly difficult to rebuild after devastating hurricanes, the surge in manufacturing home pricing has been a boon for billionaire Warren Buffett who made a big financial bet on the largest manufactured housing builder, Clayton Homes, back in 2003.

The industry, led by Warren Buffett’s Clayton Homes Inc., is peddling such pricey interior-designer touches as breakfast bars and his-and-her bathroom sinks. These extras, plus manufacturers’ increased costs for labor and materials, have pushed average prices for new double-wides up more than 20 percent in five years, putting them out of reach for many of the newly homeless.

 

Phil Lee, the 74-year-old founder of LeeCorp, has been riding a wave of retiring baby boomers who want affordable luxury. Driving a reporter in his black BMW SUV through Bayside Estates in Fort Myers Beach, where many of the fanciest homes he sells are installed, Lee points out units with pitched roofs that look almost indistinguishable from conventional homes, facing canals with boats tied outside. Their owners, former dentists, doctors, executives, and others, spent upwards of $150,000 to buy aging units just to clear the way for something more luxurious. On a palm-lined street flanked by ranks of 1970s-era trailers, Lee sees profit. “There’s no end to replacing these homes,” he says. “You get a hurricane in there and it really accelerates things.”

 

Terms such as “mobile home” or “trailer” are now verboten in an industry striving to break free of its downscale origins. Buffett’s Clayton Homes, which produces almost half of all new manufactured housing in the U.S. and competes with such companies as Cavco Industries Inc. and Champion Home Builders Inc., still builds lower-priced units, but there’s barely a sign of them on its website, which is mostly devoted to high-price models. The 2,000-square-foot Bordeaux features a separate tub and shower, a computer station, and a mud room, with prices starting at $121,000 and ranging as high as $238,000, not including delivery and installation costs. Clayton declined to comment.

Of course, while mobile homes are becoming increasingly cost-prohibitive for low-income families in Florida and Texas, Silicon Valley's future tech billionaires can't seem to get enough of them.

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Akzed's picture

"Can the shit leopard change his shit spots, Randy?"

nope-1004's picture

Classic asset bubble as a result of cheap lending, low standards, and rock bottom interest rates.

The big lie is that valuing money at nothing (0%) is good for you, because you can borrow cheaply.  Witness above how good that is going.  The truth is low interest rates suck the life out of the average worker.  Wages stagnate and the time component to your labour is removed, because borrowing is so cheap it glosses over the inequities in production and innovation.  This just proves how BROKE and insolvent the big fed member banks are.

F'n Fed needs to be shot and pissed on.

 

Five Star's picture

The average home takes twice the years of work to afford as compared to the 60s:

http://thesoundingline.com/median-home-prices-work-vs-gold/

espirit's picture

Meh, we don't have to worry about that at Camp Fema. 

Bes's picture

Banksters making out like

bandits

on housing prices based

on fractional reserve pretend money

a fraction of which was "lent" to them

by fiat paper a mill

the FED

for 0%

----

and Trump ain't doing one

fucking thing to change it

lil dirtball's picture

> and Trump ain't doing one

> fucking thing to change it

Ha ha! I laugh at your continued misplaced loyalty to a system that fucks you every day that you wake up. You will wake up and engage it again tomorrow - and get fucked again.

Ha ha, sulking ZHombie! Ha ha!

Offthebeach's picture

Style aside, a new 1960's house, today, is an illegal house.  In spite of nail guns, adhesives, PEX plumbing, and other efficiencies,  they have not dropped the cost of houses because of insane building codes that basically want you to live in a bunker, cost managed and gold plated as if the Pentagon specd it.

BTW, if you dont mind getting dirty, dusty, cut every now and then, you can have a totally remodeled house for ...$20-50k.  

We used to fix our own houses, put our own additions on, add bathrooms, paint, heck even mow our lawns.  Now?...

Paul Kersey's picture

There may be granite on the counter tops, but now, even in upper end stick-built homes, they are putting vinyl on the floors. Five years ago, you couldn't sell a house with vinyl floors. Today, they call it Luxury Vinyl Plank (LVP), but it's still just vinyl that's supposed to look like hardwood floors. A couple of years ago, they started showing it on HGTV house flip shows, and now the buyers accept it as "luxury". PT Barnum has got to be laughing from the grave.

totenkopf88's picture

With good solid hardwood going for $11/+ a sq ft installed that is not hard to believe people go with vinyl

City_Of_Champyinz's picture

God installing hardwood flooring is like the easiest thing in the world to do to your home...

AGuy's picture

"God installing hardwood flooring"

I tried once praying to god to install hardwood flooring, but like most contractors, he failed to show up. /sarc

amadeus39's picture

NOt easy at all. Especially if old floor is not square or level. hardwood flooring is not easy  to cut and nail either.

 

shovelhead's picture

Jesus Christ.

If you can make a hamburger you can install a hardwood floor. Just need the right tools.

lincolnsteffens's picture

Nothing worth doing is easy. Installing new hardwood tongue and groove flooring is technically easy but it does require labor. They used to use cut nails hammered in one at a time and then "set" below the top of the tongue. Then someone came up with a mechanical nailing device that had to be struck hard with a heavy mallet. Now you can use electric or pneumatic nailers that you just pull the trigger once for each nail. OK so you have to cut a few pieces. No reason you can't just use a hand saw the old fashioned way.

People should stop being such wimps and learn how to do things for themselves. When you have completed an improvement to your own home you will feel better about yourself. Look it up on the internet!

freedogger's picture

Yeah try building a decent set of steps with hardwood. 

Not My Real Name's picture

Agree. I was going to refloor my carpeted stairs with hardwood, but after looking at the vinyl "wood" option, it made little financial sense to go with the real thing. Especially since it is extremely hard to tell the difference -- and it's even tougher to tell the difference on stairs since the stair bull noses are real wood anyway. 

The latest technology is truly amazing.

Offthebeach's picture

I like vinyl.   Softer then tile, cleans up easy.  Suck of it? Pop the baseboard, get a roll, edge glue, put the board back..$500, a easy day.  Done Sidney done!

 

 

amadeus39's picture

Vinyl plank flooring is better than hardwood. Looks the same as hardwood, easier and less costly to install and maintain and can withstand exposure to water much better than wood. 

 

Dougs Decks's picture

Have put in a bunch of the vinyl plank in the last few years,,, Seems to work good so far, but one scratch in the middle of a floor , and you are fucked,,, Stuff is not designed to be taken apart and put back together again,,, At least hardwood can be sanded a bunch of times,,,

amadeus39's picture

Vinyl plank flooring is better than hardwood. Looks the same as hardwood, easier and less costly to install and maintain and can withstand exposure to water much better than wood. 

 

canisdirus's picture

It may look similar, but it is worse in most every way except maintenance. Sanding and re-finishing is a pain, but you can't get the feeling of actual wood without using real wood.

I've seen houses where they replaced practically every floor with the stuff except a few spots with real wood and the difference was stark. The stuff is made for HGTV flip shows - it's Potemkin hardwood flooring.

HRClinton's picture

It's clear that it's not just the rich who don't like trailer people. 'God' doesn't like them either.

finametrics's picture

The truth is low interest rates suck the life out of the average worker.

 

I don't think the problem is low rates. I think the problem is like you said at the end, central banks (and fractional reserve). Basically creating fiat currency out of thin air. That is the problem.

No Time for Fishing's picture

Lower rates and mortgage interest deduction do nothing to make homes more affordable. People buy homes based off how much they can afford a month. Any given neighborhood is priced for homeowners at a given income level. Interest rates go down home price goes up to keep the note the same and vis versa. Eliminiate the mortgage interest deduction and the monthly expense of that will drop home prices by a comparable amount (that effect will generally not be seen in neighborhoods where income is low enough that deductions are not itemized). 

Bernie Madolf's picture

Can't let housing go down

.gov budgets dependent on ever increasing assessed values.

JuliaS's picture

Imagine being charged to park an RV based on an arbitrary tire value assessment. Oh sh... I shouldn't be giving them ideas.

Moe Hamhead's picture

Did I read that right:  Wilma destroyed 1.8 million mobile homes! And there are no basements in Florida to move into.

buttmint's picture

moe

correct..no basements. High water table. Basements are good investments, but you would be running sump pumps 24/7.

Kaiser Sousa's picture

you r approved for the utilization of the following trademarked encantation...

DEATH TO THE MONEYCHANGERS.

Kaiser

Kaiser Sousa's picture

thanks...

good to be thought of..

freedogger's picture

GET A HOBBY: work with ROCKS and CEMENT like JOHN DUNSWORTH

https://www.youtube.com/watch?v=3mcQfP8k51s

RIP MR Lahey

City_Of_Champyinz's picture

Now that is the last hobby I would have imagined Mr. Lahey getting involved with.  If you are looking for a hobby that you can obsess over and spend way too much money on take up fly fishing and fly tying...

Bubba Rum Das's picture

John Dunsworth was, hands down, one of the best character actors to ever come out of Canada, let alone North America.

Bobzilla. Do not piss him off's picture

Randy, can you smell that? The shit winds are blowing and a shiticaine is on the way.

Bobzilla. Do not piss him off's picture

Randy, can you smell the shit winds in the air? Smells like a shiticaine is coming!

RafterManFMJ's picture

All that granite becomes shrapnel when the inevitable tornado touches down.

Juggernaut x2's picture

The way I read it is that people buy these in FL with the understanding that eventually a hurricane will destroy them anyway so they are basically disposable homes.  These Baby Boomers can't die off fast enough.

AGuy's picture

"The way I read it is that people buy these in FL with the understanding that eventually a hurricane will destroy them anyway so they are basically disposable homes. These Baby Boomers can't die off fast enough."

Be careful what you wish for: Their replacements: Millenials buy Tiny homes or live in used motor homes. Both are much worse that single wides.

Shpedly's picture

This baby boomer will feast on your carcass before I "die off".

css1971's picture

Containers. https://containerhomes.net/

 

In the not so distant future, we'll all live in containers. Moving house will involve hoisting the thing on to the back of a truck, then on to container ship to the destination.

espirit's picture

In that case, I want the top bunk.

Shit flows downhill.

flacorps's picture

They have them that crank open into much larger spaces.

freedom1798's picture

A double wide container (two together) might not be too bad, so you get a 16 feet width.  Eight feet wide is too narrow.

besnook's picture

the irony nowadays is the trailer is built as well if not better than the new stick built home so it is a bit of a bargain compared to the cost of a similar stick built home.

itstippy's picture

"Goff—who just wants to replace the wrecked 1,200-square-foot trailer that she bought 17 years ago for $46,000, including the cost of land—says she feels boxed in. Her mobile-home community won’t allow single-wide homes or older used models as replacements. And every home must have a carport. She’s willing to give up such upgrades as the higher-end countertops, but that probably won’t be enough. Between her Social Security check and income from her job at Ace Hardware Corp., she earns only about $23,000 a year. “I just want a home that’s equal to what I had,” she says. “My home was a beauty.”

Had Ms. Goff insured her home for what it was currently worth, she could now replace it with a similar home.  This is why you insure your stuff that you can't afford to replace if it's wrecked and can't live without.  Had her home burned down, instead of being destroyed by a hurricane, she'd be in the same position (fucked).

This nice lady figured that since she owned the home outright, and thus wasn't required by a mortgage company to insure it for replacement value, she could cut corners on her home insurance.  She took a risk.  It bit her in the ass.  That happens.

No one is going to sell her and install a brand new 1,200-square-foot "beautiful" trailer with a carport for $46,000.  

BabaLooey's picture

You'd be surprised.

This is Florida.

I worked in the 80's in the industry,

If you're smart, you can pick up a decent tornado magnet for that type of cash. Carport included.

skipjack's picture

Wrong, idiot. A 30 yo trailer is never gonna be insured by any insurance co at $120k. At best, you'd get replacement value insurance at 46k or whatever.