Can Mobile Homes Appreciate? (The answer is yes they can!)
Of all the lies about mobile homes, the one that upsets me most involves mobile home appreciation.
Buying a Mobile Home: Return on Investment
The Method of Calculating a Manufactured Homes Value
First and foremost, the book value of a mobile home has very little to do with the actual market value. Those are 2 different statistics and are calculated in different ways. Data Comp describes book value as calculating ‘the average depreciated the retail value of a manufactured or mobile home.”
They also go on to explain, “The NADA Value Guide was a fairly accurate market value guide in 1975. Unfortunately, in today’s market, it can no longer be relied upon to accurately determine the local market value of a manufactured home.“
A market-based appraisal is the same method of determining a manufactured homes value as they use with stick build homes and is the only accurate way to gauge the total worth of the home. Data Comp is one of the largest appraisal companies in the nation and has estimated and appraised over 200,000 manufactured homes. The companies data is sound and that’s where we will be getting our data for this article.
The following is how Data Comp calculates a market based comparable appraisal:
- Includes a thorough inspection of the home
- Researches recent, similar sales transactions in the local area
- Analyzes those sales in comparison to the home being appraised
- Produces an independent, expert, and unbiased opinion of value
If you want the true market value of a mobile home, a market-based appraisal is the only way to get it. You can’t just go to a website or a book and look up the make and model of the home and get an accurate estimation.
Buying a Mobile Home: The Proof that Manufactured Homes Can Appreciate
- 97 of those homes increased in value by an average of $2,985
- The remaining 88 decreased in value by an average of $2,822.
Variables that Affect Appreciation
- The housing market, in which the home is located, will have a significant impact on the future value of the home.
- The community, in which the home is located, has a similarly significant impact on the home’s future value.
- The initial price paid for the home.
- The age of the home.
- The inflation rate.
- The availability and cost of community sites, which reflects the supply and demand influences on the home’s value.
- The extent of an organized resale network, where an organized network will usually result in homes selling for a higher price than in markets without such an organized network.
The myth that our homes don’t gain value is simply not accurate. Yes, some manufactured homes can lose value over time but these statistics show that more gained value than lost. Stick built homes can lose value too and the economic turmoils we have had in the past few years is proof of that.