Issue link: https://read.dmtmag.com/i/231807
COMMUNITY CONSULTANT New Year's Predictions For 2014 BY FRANK ROLFE As we welcome in 2014, we should all think about what will change and what will remain the same in the New Year, so we can proactively modify our plans accordingly. Here are my predictions for what 2014 will hold for the manufactured home community business. Demand for affordable housing will remain staggering Anyone who owns a community in a decent location knows that they have been blessed with more demand than they know what to do with. We are getting between 50 and 100+ calls per month at every community we own. We have communities that can rent 15 homes a week (it happened a couple times in 2013). As an industry, everything is in our favor in this regard, as a result of the continual decline of the U.S. economy. All community owners are literally in the right place at the right time in 2014. Our country will continue on a path to financial ruin – which is both good and bad for all of us Although we like the demand, we are as alarmed as anyone that 20% of Americans have a household income of $20,000 per year or less (which is nearly defined as the poverty rate) and that roughly 50% of all Americans are on some type of social program. I think we'd all be willing to sacrifice a little on the demand side in order for America to be a better place for our kids, who may never know a time when the nation was in a winning position. I don't see any improvement in the U.S. economy in 2014. And the effects of Obamacare and other botched initiatives will only accelerate the decline. Baby Boomers will continue to stoke demand for homes as well as RV spaces With 10,000 baby boomers retiring per day, the demand for downsizing can be felt in both our manufactured housing community occupancy as well as in our RV occupancy in certain markets. We think that this megatrend will continue to fuel the industry for decades. You probably noticed how many seniors came by your community office last year. Dealer sales will remain terrible JANUARY 2014 26 THE JOURNAL Can you believe that it's been 14 straight years of lousy retail sales? That's the worst record I've ever seen. I think any sane person has basically given up hope that sales will ever break above 100,000 units a year again. And that's sad. Community owners, who provide their own homes, can find willing customers faster than they can say grace over. But dealers can't give units away, sitting on their lots, until they can figure out how to provide realistic, mainstream financing channels that don't rely on perfect credit scores and huge down payments. Legacy will continue to lead the way for community owners to fill lots with new homes A manufacturer who understands the relationship between sales and offering their own financing is Legacy Homes out of Texas. We've become a huge customer – and the biggest fan -- of their "Park Finance Program", in which they finance roughly 2/3 of the sale. If more manufacturers followed their example, 100,000 units sold would not be a hard figure to beat. And if you missed Legacy's all-expense-paid two-day customer appreciation event in Ft. Worth in 2013, you blew it. I'll be there again in 2014. Conduit will continue to bring a new sparkle to community financing The continued strength of the conduit financing market has been extremely favorable for those buying and refinancing their communities. These are the finest commercial loans that exist, and every owner who has one will tell you of the benefits, which include fixed rates, non-recourse and 10-year terms. MHI has turned the NCC around and their events should continue to prosper in 2014 Did you go to the NCC event in Chicago in 2013? I did, and I liked it so much I'm bringing my wife this year. It was the proudest I've ever been of the industry, and I want my wife to see that community owners do not all wear Hawaiian shirts and make crude jokes. The Louisville and Tunica home shows will display the best designs ever My second proudest experience of 2013 was seeing how good the product is becoming at the new home shows at Louisville and Tunica. I was extremely impressed by how close the home design science is stacking up with stick-built. Martha Stewart would be proud. I'll be there to check them out in 2014, too. The entry of The Carlyle Group may signal more institutional players ahead The Carlyle Group – the largest private equity group in the U.S. – has now officially entered the manufactured home community business with their two properties purchased in Florida at the end of 2013. Just as Warren Buffet gave the industry some clout, this purchase will also have positive ramifications for values and attracting interest to the industry. Favorable media attention was everywhere in 2013 and should continue in 2014 Articles in USA Today, the BBC News and The Wall Street Journal were all bullish on the industry in 2013. And I also found compelling articles in such publications as Dwell Magazine and Town & Country. The concept of "micro houses" is becoming fashionable, and the financial performance of community operators is gaining attention. Add on the "green" ecological benefits of "living small", and we could become a media darling. 2014 will be a great year for community owners I don't know of any industry as poised to prosper in 2014 as the manufactured home community business. Every trend in America is working in our favor – and most are only just beginning. T J Frank Rolfe has been a manufactured home community owner for almost two decades, and currently ranks as part of the 17th largest community owner in the United States, with more than 9,000 lots in 17 states in the Great Plains and Midwest. His books and courses on community acquisitions and management are the top-selling ones in the industry. To learn more about Frank's views on the manufactured home community industry visit www.MobileHomeUniversity.com.