The housing market is white hot. Why?
If you’re in the housing industry, manufactured or otherwise, you’ve surely seen the incredible demand for homes. Low inventory preceding the pandemic, combined with a high lumber prices, a rush out of the large, locked down cities (LA, SF, NYC, etc.), low interest rates, and other factors have combined to create a tremendous demand for homes. In fact, homes in hot markets are being sold sight unseen for 10s of thousands over asking price, and that doesn’t seem to be slowing down any time soon.
Take a look at the map below. The graphic shows the difference in home inventory pre-Covid vs today. Hawaii is the ONLY state with more homes for sale now, and some states, like Idaho and New Hampshire, have less than half of the homes available that they did just a year ago.
The supply is low, demand is high, and we all know what that does to the price: it drives it up. When site built housing prices are through the roof, home buyers look for more affordable alternatives. And ideally, that affordable alternative is manufactured housing.
Google Dominates the Search
But how do we quantify the increasing interest in manufactured housing? Shipments, sales, financing applications, etc. all follow demand, but that data can be months, even years, behind the increase in demand, so those options aren’t very useful in the moment.
Fortunately, we have Google. Most Americans go to Google when they want to learn about a particular topic, and manufactured housing is no different. If a frustrated home buyer is tired of not being able to purchase a new home, that buyer will go to google and ask for ‘affordable housing options’. From that search query, they’ll find manufactured housing, and then they’ll continue the search for manufactured housing options in their area.
As you can see from the data graphic, Google processes A LOT of search queries from A LOT of users. There is no better resource for seeing consumer interest than analyzing Google search data.
Record Interest in MH
Here’s some good news for you…nationwide interest in manufactured housing has never been higher. If you look at historical trends, interest typically peaks in July (marked by a star below), and hits the bottom in December. 2020 was a little different in that interest bottomed out in March/April, peaked in July, then fell off again, most likely due to the uncertainty surrounding the election.
Now that we’re past that and the pandemic seems to be nearing its end, public interest in manufactured housing is at the highest it’s ever been, even though we’re still in the colder months. This is the public response to low existing housing inventory and soaring new site built home prices – home buyers need a more affordable option.
Analysts don’t see much change in the site built inventory in 2021, so the manufactured housing industry is primed for the most growth we’ve ever seen. Demand has never been higher, and home buyers are desperate for an affordable housing solution.
Long Term Trends
The need for affordable housing is nothing new. As you can see from the graph below, interest in manufactured housing has been growing since 2010/11. This period marked the beginning of the housing recovery, and the real end of low price homes coming out of the Great Recession.
Also note how the trends are the same every year (except 2020, of course) – peak in July, bottom out in December. There’s no reason this shouldn’t continue this year. Most analysts agree the pandemic will have passed by mid summer, and buyer confidence will be at an all time high. As the digital, ‘at home’ workers continue to look for more affordable options outside of the large metro areas, manufactured housing will continue to be an excellent solution for those looking for better housing options.
Where do we go from here?
We get ready to meet the demand. 2020 took us all by surprise, but that won’t be the case in 2021. We know there will be high demand, and we know more buyers are going to be shopping for a manufactured home than ever before. Whether you’re a lender, retailer, manufacturer, or supplier, etc., we all need to be prepared to have the busiest year we’ve ever had. 2021 will be the year for the industry to show home buyers how valuable and accessible our product is, and a perfect time to introduce new, younger buyers to the value of manufactured housing.
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