Mobile homes do not appreciate like site-built homes. Even though most mobile home units never move again once installed in a mobile home park, insurance and financing may be akin still to motor vehicle ownership. Generally, motor home values may depreciate; most traditional site-built homes don’t. But this statement needs a qualifier. If the mobile home owner also owns the land or parcel in a desired location on which the mobile home sits, the mobile home should hold its value or depreciate less than similar homes in less desirable neighborhoods where the land is not owned.
Further contributing to the mobile home perception of depreciation, increased zoning restrictions have limited the growth of mobile or manufactured home parks in major metropolitan areas. Even more rural, suburban areas have limited the growth of mobile home parks due to over-crowding in zoned park areas, taxing or burdening local utilities, and clogging street and highway traffic.
As with traditional, site-built homes, mobile home values hold their value or appreciate more if the mobile home is located in a desired area. It’s location, location, location. Furthermore, as previously mentioned, if the mobile home owner also owns the parcel on which the mobile home sits, he can sell his mobile home for more than what he paid initially. Of course, the mobile or manufactured home needs to be maintained just like a traditional home for the owner to realize its optimal value at resale.
Typically, double-wide and triple-wide mobile and manufactured homes that are well cared for and are located in desired areas fetch the best price. Mobile homes began as single-wides or travel trailers for construction workers in the 1940’s. Financing and insurance institutions regarded them as motor vehicles. During the beginning of the 1950’s, mobile homes were marketed as an inexpensive alternative to traditional, site-built homes.
As a result of this marketing, mobile home values increased along with their popularity. In the mid 1950’s, the physical characteristics began to change, sharing more of the amenities and characteristics of a traditional home. Instead of 8 feet wide, mobile homes were now 10 feet wide, and they were getting longer. Many double-wide mobile homes started resembling traditional homes with permanent foundations including porch and yard amenities.
Mobile homes have evolved into manufactured homes. These homes resemble traditional homes. Even though manufactured homes are located in manufactured home parks, many have nice front and back grass yards, decks, and porches. Many of these homes experience good appreciation if they are well-maintained and are located in desirable neighborhoods.
Unfortunately, most mobile or manufactured homes still suffer the enigma of being less than a “real” house. Historically, mobile homes were treated as motor vehicles and did not compare in value to a traditional home. As a result, financing and insurance were hard to get. Banks saw little value or collateral in a mobile home since they depreciated like motor vehicles.
Another stigma was that mobile or manufactured home parks depreciated the value of nearby, traditional housing neighborhoods. Zoning regulations required that these parks be located in specified areas or distances away from other neighborhoods. Many people had and still have the NIMBY (not in my backyard) attitude regarding mobile home parks because their home values may depreciate as well. Perception counts.
To repeat, a good way to hedge against adverse mobile home depreciation is to purchase a mobile or manufactured home that simulates as much as possible, traditional site-built homes that have been well-maintained and are located in desired neighborhoods.