Do Manufactured Homes Appreciate in Value?
Manufactured homes will appreciate at the same market rate as other homes in the same neighborhood, but as with all housing they are subject to the same market factors, which affect appreciation. The factors that impact future value include:
- The housing market in which the home is located;
- The community in which the home is located;
- The initial price paid for the home;
- The age and maintenance of the home;
- The inflation rate
This study, conducted by Dr. Charles E. Hegji of the Department of Economics and Ms. Linda Mitchell, Coordinator of the Alabama Voice of Auburn University Montgomery, concludes that manufactured housing has no apparent negative impact on the value of adjacent site-built properties.
The following other studies concerning the impact of manufactured housing on adjacent site-built properties have been completed:
- Hicks, 1982 - California
- Gruber, Shelton & Hiatt, 1986 - North Carolina
- Nutt-Powell, Hoaglin & Layzer, 1986 - New Hampshire
- Werner & Johnson, 1993 - Michigan
- Shen & Stephenson, 1997 - North Carolina
All of these studies concluded that manufactured homes do not appear decrease the value of adjacent site-built properties. A technical report was completed to investigate the impact of manufactured housing on the value of adjacent site-built housing in two Alabama counties. The study considers the impact of both individual manufactured homes and manufactured home clusters on the value of adjacent site-built housing. This present study used 1997 and 1999 property valuations from Montgomery and Lee counties to access the impact of proximity to manufactured housing on site-built property values. Weighted average annual appreciation rates, as well as average annual appreciation rates, were calculated. The study concludes the following:
- The appreciation rates of individual manufactured homes in both counties were comparable to those of site-built structures
- In both Montgomery and Lee counties, clustered and individual manufactured housing appreciated between 1997 and 1999. The appreciation rate of individual manufactured housing units was higher in both counties
- For both Montgomery and Lee counties, proximity to manufactured housing does not appear to be a significant determinant of property values of site-built residential housing
Since 1995, with stricter federal building codes and anchoring laws, manufactured housing has become more similar to site-built housing in terms of appearance, quality and safety. Newer manufactured homes offer an appropriate and affordable housing alternative for many people.
Co-existing with modern, more structurally sound manufactured homes are old "trailers" and "mobile homes." These older homes have most likely given rise to a number of misconceptions and stereotypes concerning manufactured housing, particularly the belief that proximity to a manufactured dwelling decreases the value of site-built properties. Despite this belief, evidence has not yet been found to support the notion that manufactured homes (and "trailers" and "mobile homes") have caused a decrease in surrounding property values. Consistent with the findings of earlier research in this area, the results of the present study lend additional support to the idea that manufactured housing does not have a negative impact on the value of adjacent property.
Data Sources: AUM Study 2000; MHI Understanding Today's Manufactured Housing