Mobile Home Dealers

SIC 5271

Companies in this industry

Industry report:

This industry consists of establishments primarily engaged in the retail sale of new and used mobile homes and their parts and equipment. This classification excludes companies selling travel trailers or campers; these companies are discussed in SIC 5561: Recreational Vehicle Dealers.

Placements of mobile homes, referred to as manufactured homes, in the United States totaled 52,200 units in 2009, according to the U.S. Census Bureau. Of those units, 19,200 were single-wide units and 31,900 were double-wide units. The overall average price was $63,100: $39,600 for a single-wide and $74,400 for a double-wide. Over two-thirds (70 percent) of all manufactured homes in 2009 were sold in South region of the United States. The West region accounted for roughly 13 percent of sales, and the Midwest and Northeast regions held 10 percent and a 7 percent share, respectively.

According to industry statistics, there were 5,972 manufactured home dealers in the United States in 2009, which employed 31,195 and generated more than $4 million in revenues. According to the Manufactured Housing Institute, there were 61 manufactured housing corporations with 156 plants producing homes. The industry's unit sales and revenues plummeted as the housing market crashed during the late 2000s.

The U.S. Census Bureau reported 8.8 million mobile homes in 2000. Growth in the industry was highest in the 1970s, with an increase of more than 2.5 million mobile homes in the decade. By comparison, the number of mobile homes in the United States in the 1950s was 315,000. As of 2006, approximately 4,250 establishments were classified as manufactured home dealers in the United States. Those establishments employed a total of almost 26,000 workers. The combined annual sales of mobile home dealers in the early 2000s were approximately $11.1 billion.

What had been a one-time lift for the mobile home industry in 2005 became a concern for the industry later in the decade. Following hurricanes Katrina and Rita along the Gulf Coast in August and September 2005, the Federal Emergency Management Agency (FEMA) spent $2.7 billion to buy 145,000 mobile homes for those displaced by the storms. That equated to a bulk rate of approximately $19,000 per unit. In 2007, however, FEMA began auctioning off thousands of those trailers, a move that mobile home dealers feared would flood the market and hurt prices for new units.

The mobile home retail industry originated in the United States following World War II. The growth of suburbs coupled with increased demand for low-cost housing enabled mobile home dealerships to establish a foothold in the housing market. Sometimes referred to as "trailer homes," mobile homes became immediately popular because they allowed families to own homes at a relatively inexpensive price. Moving was also made easier by these "houses on wheels." As mobile home sales rose, mobile home parks, which leased plots of land to mobile home owners, began to offer more conveniences to their renters, including swimming pools. Mobile home owners also enjoyed the ordinary amenities offered by rental parks, like yards to mow and flowerbeds to plant.

The industry experienced steady growth until the late 1970s, when mobile home sales sagged with the rest of the economy. Even after the recession lifted and the economy improved in the 1980s, the mobile home industry lost some of its market share to traditional homes that became more affordable to consumers due to lower interest rates. Some large mobile home dealers filed for bankruptcy during this depressed market.

Mobile home retail sales began to pick up again in the late 1980s with the introduction of "manufactured homes," which are steel-framed homes built in factories and driven to lots. These homes usually include at least two bedrooms and two bathrooms and cost roughly one-quarter of the price of regular houses. The mobile home industry further solidified its position during the 1990s: in 1991 total sales for mobile home dealers totaled $5.57 billion, and by 1999 sales topped $14 billion. Unit sales increased from around 150,000 in the 1980s to more than 350,000 in 1999.

In the late 1990s, about 20 million Americans, or 7 percent of the population, lived full time in more than 8.5 million mobile homes. Approximately 3.3 million mobile homes were located in the southeastern United States, 1.9 million in the Southwest, 1.7 million in the Midwest, 864,000 in the Northwest, and 855,000 in the Northeast.

At an average cost of $43,000 per unit, manufactured housing was the fastest-growing sector of the housing industry. It accounted for more than 25 percent of new single-family homes built in the United States. Mobile homes were alternatively marketed as cost-effective retirement homes, affordable housing for working folks, and seasonal housing for others.

Placements of manufactured houses plummeted throughout the 2000s. Shipments, which totaled 280,900 units (88,300 single, 190,300 double) in 2000, fell to 174,300 units (41,100 single, 128,700 double) in 2002 and to 122,900 units (28,700 single, 89,400 double) in 2005. Total units sales fell below 100,000 in 2007 to 94,800 units. (28,600 single, 63,100 double). When the U.S. housing market crashed in the late 2000s and the country experienced a credit crisis, unit sales fell even further, dropping to just 52,200 units (19,200 single, 31,900 double) in 2009.

The average price of manufactured homes increased during the first half of the decade, from $46,400 per unit ($30,200 single, $53,600 double) in 2000 to $62,600 per unit ($34,100 single, $68,700 double). Prices then increased only slightly during the remainder of the 2000s. In 2009, the average unit price was $63,100 ($39,600 single, $74,400 double).

The deep drop in sales, combined with stagnated pricing caused problems for the industry. While the entire industry suffered declining, several players left the market or filed for bankruptcy protection. Fleetwood Enterprises, which suffered from both massive declines in its manufactured housing and its mobile home business segments, shuttered its doors. In addition, both Champion Enterprises and Palm Harbor Homes filed bankruptcy.

Of the 52,200 manufactured homes placed in the United States in 2009, 36,200 were placed in the Southern United States. Roughly one-fourth of manufactured homes were placed inside of manufactured housing communities, either in subdivisions or trailer parks. The remaining three-quarters were placed outside of planned manufactured housing communities. Eighty-six percent had three or more bedrooms and 84 percent had central air conditioning installed. The average square footage in 2009 was 1,215 square feet for a single-wide and 1,730 square feet for a double-wide.

With the acquisition of former industry leader Oakwood Homes Corp. in 2004, Clayton Homes Inc. of Maryville, Tennessee, Champion Enterprises to become the top maker of manufactured homes in the United States. Clayton Homes has 35 home building facilities and more than 1,000 home centers. The company has built more than 1.5 million modular homes. The company was purchased by Berkshire Hathaway in 2003 and now operates as a subsidiary of the conglomerate.

Champion Enterprises of Troy, Michigan, had 30 manufacturing facilities in North America and Europe. Although posting 2009 revenues of over $1 billion, the company felt the negative impact of the severe downturn in the industry and filed for bankruptcy protection. Champion Enterprises emerged from bankruptcy in 2010. Another industry leader was Palm Harbor Homes of Addison, Texas, which sold its manufactured homes through 95 retail stores (company owned) and 150 independent dealers. Suffering from deep declines in its sales (from 7,900 units in 2005 to 3,900 units in 2009), the company filed for bankruptcy in late 2010.

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