The follow cities, among several others, exhibit tremendous potential for dominance in the current and future manufactured housing marketplace. Our first edition of metros to watch considers various factors, including employment metrics, population density, income, and economic shifts.
The Houston Metropolitan Area is a leading MSA for manufactured housing retail sales in the United States according to the Manufactured Housing Institute. With over seven million residents in one of the most populous states in the country, the Houston MSA represents a strong market for manufacturing housing, specifically as employment has returned to pre-pandemic levels. Houston is only one of seven cities in the United States that has recovered all pandemic job loses, meaning that the population growth and demand for affordable housing is a stable hedge despite economic shifts. Furthermore, this is an extremely positive development that anchors the Greater Houston Metro Area as MHI’s top city for manufactured housing transactions.
Tucson, Arizona offers a desirable blend of livability and geographic appeal for over 500,000 residents in a surging division of the southwestern United States. Subsequently, demand for housing in Tucson is bolstered by a shortage of options and high construction costs within Arizona. SoFi notably states that “local real estate pros say that some aspiring Tucson homeowners are finding it hard to keep up with soaring housing prices, which Zillow reports increased by 29.5 percent over the past year. Given that Tucson has a median income of $43,425, it’s understandable how Tucson might be out of reach for some buyers.”
With one of the highest populations in Arizona, desirable living conditions, a shortage of housing options, and a low median income, the manufactured housing market in Tucson is set to thrive as one of the most lucrative in the country.
Detroit is a top five metro area for manufactured housing retail sales. Factory-built homes in the industrial city of Detroit are an extremely desirable living option, with the average cost of a manufactured home just exceeding $70,000 for construction within the area, in addition to a monthly payment ranging from $600-$1,200 for residents in local mobile home communities. Detroit was ranked by U.S. News and World Report as the third best place to live in all of Michigan. The city’s drastic livability improvements over the last decade, paired with an unrivaled economic presence in the heart of Michigan, creates a strong demand for affordable living options within the MSA. A median income of approximately $31,000 supports further supports the need.
The favorable numbers bolster the market and creates plenty of cash flow opportunities for investors looking to jump into the manufactured housing asset class.
Jacksonville is one of the largest metro areas in the United States, and it is the largest city by area in the contiguous United States. With no state income tax, a tropical climate, and an abundance of employment opportunities, the Jacksonville MSA is one of the prime residential destinations in Florida.
The average cost of manufactured home construction in the Jacksonville MSA is roughly $70,000, according to manufacturedhomes.com. The average monthly payment for residents ranges from $632 to $1,264 (based on a purchase price range of $115,000 – $230,000). Manufactured housing options in Jacksonville offer an appealing living option for many looking to establish a footprint in one of Florida’s largest metro areas. Subsequently, this drives a strong demand for manufactured housing parks across Duval County, setting the stage for continued growth in a recession-resistant sector of commercial real estate.
Dallas-Ft. Worth, Texas
The Dallas-Forth Worth Metropolitan Area is the second most prominent market for manufactured housing retail sales in Texas after Houston, and one of the overall strongest markets in the United States. Given the unrivaled density of the metro area, the market for affordable housing continues to drive a strong demand. With well over 7.5 million residents, Dallas checks in as a top-five growth market in terms of population metrics.
The area’s strong performance over the last several years creates a need for feasible site building options and affordable living communities, which has been key to bolstering the manufactured housing market and thus generating an extremely active environment for mobile home park investors within the Dallas Metroplex.
Sources: Manufactured Housing Insider, SoFi.com, ManufacturedHomes.com and the Manufactured Housing Institute.