Weekly Housing Trends

The big story

Top: Casey TeVault bought this manufactured home in California for $12,000 and sold it for $120,000. Bottom: Alex Wright listed this modular home for $320,000 and ended up selling it for $250,000. (Credits: Casey TeVault/CaseyBuysHouses; Alex Wright/DealForge.)

Where can you buy a California home just steps from the ocean for less than the price of a used car? At Huntington By The Sea, a mobile home park where Casey TeVault recently purchased a 1,400-square-foot mobile home for $12,000, invested $46,000 in renovations, then sold it for $120,000.

“Some parks are rough, but this one is beautiful,” he says, adding that many of the dwellings boast sunrooms and roof decks. “It doesn’t hurt to see the water from your roof!”

Forget the “trailer park” stereotype. They’re now called “manufactured homes,” and the new housing law could turn them into real estate’s next big thing. What’s changed: Removal of the steel chassis requirement—the permanent steel frame that manufactured homes are built on and transported with—means far fewer size constraints, opening the door to massive, multi-story mansions indistinguishable from the “stick-built” house next door. Plus, higher FHA loan limits for these dwellings could “expand the buyer pool and make these projects financially feasible for both developers and investors,” says Rod Khleif at Lifetime Cashflow Academy.

The main draw for buyers? An affordable average $141,450 price point that’s appreciated 70.1% since 2019—even faster than site-built homes.

Why some buyers are wary

“The purchase price may look attractive, but manufactured homes are a nightmare to sell,” says Max Cohen at FL HomeBuyers. “The buyer pool is much smaller; financing and insurance can shrink it further. If they’re on leased land, they’re even harder to exit. If I can’t sell it cleanly, I don’t want it.”

Alex Wright at DealForge experienced this messy sales process firsthand on a factory-built modular home near Three Forks, MT.

“It had a permanent foundation, looked and functioned like a single-family home, but because it was built in the 1970s, verifying records to determine whether it met the requirements to be treated as a single-family residence was difficult,” Wright recalls. “Some documentation no longer existed, and even the identification plaque looked different enough to create uncertainty. Buyers were asking, ‘Are we buying a house, or are we buying something that may be treated like a manufactured or mobile home?’ That mattered for financing, insurance, buyer confidence, and marketability.” Listed for $320,000, the property ended up selling for just $250,000.

TeVault agrees there are risks. “The two things to pay attention to are the year built and whether there is a certificate of permanent foundation,” he says. “If built before 1976, it carries higher risk.”

Wright hopes the new laws will help. “Anything that creates clearer and more consistent treatment of manufactured housing could help reduce buyer uncertainty,” he says. “Buyers can get comfortable with known risks. Unknown risks are another story.”

      

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What's up this week

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You asked, we answered

Q: Mobile, manufactured, modular home: What’s the difference?

Funtay/Getty Images

Although all three are factory-built, each category has distinct features depending on how—and when—they’re constructed. Mobile homes, the OGs, were cobbled together before June 15, 1976. After that, the National Manufactured Housing Construction and Safety Standards Act of 1974 slapped the next wave of dwellings with tougher regulations from HUD and a new name: manufactured homes.

A third type of pre-fab construction, modular homes, are the hardest to spot in a lineup, since they look exactly like a regular stick-built house. They also have the safety credentials to back it up, since they adhere to the same state and local building codes as a traditional property (which are typically stricter than HUD’s oversight of manufactured homes).

The price and financing for these properties vary, too. Modular homes average about $270,000 and will typically qualify for conventional or government-assisted loans like FHA. Mobile and manufactured homes cost a lot less, with listing prices at a median of $141,450, but the financing options depend on the property. If the home meets certain requirements, like being on a permanent foundation on land you own, it may qualify for a traditional mortgage. But if the home isn’t on a foundation or is located on leased land, you might need to pay for it in cash or take out a chattel loan—an old-timey term for money borrowed on portable property that comes with shorter terms and higher rates. However, FHA Title I and some limited leasehold programs may provide alternatives.

Got a question about real estate? Ask it here, and we’ll answer it in a future issue.

Real talk

Mischa Fisher/Zillow

Zillow’s chief economist Mischa Fisher predicts the housing market for a living. On weekends, he bets on it with his own rentals, renovations, and raw land. He reveals what owning real estate has taught him that spreadsheets never could—and why he never fully trusts housing forecasts (even his own).

Q: Tell me about your first investment property. “Around 10 years ago, I bought a townhouse in Denver in the mid-to-high $400k range that we could live in then rent out for around $3,000 per month once we moved. Rates were falling while the neighborhood was improving; I figured those two things would make it a good long-term performer. Despite the headwinds on rent growth across Denver, I’ve been able to hold rents steady.”

Q: How did your economist background impact this purchase? “I think about opportunity costs, the cost of my time. A lot of investors chase ‘passive income,’ but I believe there’s no free lunch. If you own a rental, you’re going to have to manage it sometimes. This is why all my investments are in Colorado within driving distance.”

Q: What other properties have you bought? “A single-family house in the mid-$600ks, well-loved but dated. That was a great opportunity to freshen it up, finish the basement, and boost the bedroom count from three to five. Zillow data shows that people are flexible on bathrooms and square footage, but bedroom count is sticky. Based on ROI, if you drop $100,000 on a kitchen remodel, you won’t see much return. A fresh coat of paint, a new garage or front door—those tend to pay high dividends because they’re relatively cheap for the visual impact.”

Q: What else is in your portfolio? “A land investment of 30 acres purchased at a low five figures per acre where we plan to build a community of rentals in the low double digits. It’s capital-intensive, but I lean toward ‘bring your own demand’ rather than riding the market. Investors who bought properties to flip and then got stuck holding them when rates went up—that’s what I wanted to avoid. My advice for investors is to really think through your risk tolerance. You don’t want to hear ‘so-and-so did this four years ago.’ We’re in a different environment now.”

Click here to hear more about how this Zillow economist shops for real estate.

      

Housing market of the week

Leo Young/Cornell Communities

When Leo Young first heard about manufactured homes, his mind jumped to “all the stereotypes,” like the sitcom Trailer Park Boys and Eminem in 8 Mile. “Twenty years ago, people didn’t want to touch this due to the stigma,” he says. Today, Young manages more than 500 manufactured housing units nationwide at Cornell Communities and calls the sector the real estate industry’s “$500 billion blind spot.”

The pros: “As an asset class, manufactured housing communities are attractive because it’s a simple business model: You rent out the land and maintain the infrastructure,” he says. One of his recent acquisitions for $3.35 million was Emporia Estates in Emporia, VA, with 94 occupied lots producing an annual cash flow of 8% and projected annual returns of 15–20%. Manufactured home communities are also famed for being recession-resistant.

The cons: “You’re usually working with old properties with a lot of deferred maintenance,” Young warns. Zoning regulations also vary by area, and certain states are more welcoming than others. “Historically, many local governments restricted or prohibited manufactured homes in areas with site-built homes,” he explains. Virginia recently passed laws leveling the playing field. “This reflects growing recognition that manufactured homes are a practical solution to Virginia’s housing affordability challenges.”

His advice: “Start with a community that’s manageable—i.e., under 30 units—and ideally on city utilities,” Young says. “Make sure to do your due diligence on the property to make sure you budget for any CapEx requirements over time, and understand the regulations around ongoing operations and bringing in more units.”

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