|
I was reading through The Millionaire Nurse and it was mentioned there that mobile homes depreciate (presumably in contrast to detached single-family homes). I've heard it both ways regarding single-family homes, but in normal circumstances, what is it about single-family homes that makes them appreciate as compared with mobile homes? |
|
The primary reason a mobile home depreciates is its mobility. It has to be registered in many states similar to a car and that puts a certain stigma on them. Another reason is that their construction has traditionally been much more lightweight (they have to be towed by a truck after all) and those lightweight building materials don't hold up over the years like traditional "stick-built" homes do. You probably will never see a mobile home on a city's historic register -- they just don't last as long as a traditional home. Mobile homes serve a specific purpose but outlasting a 30 year mortgage is rare. Welcome to Cash Commons Ron!
(Apr 06 '10 at 01:06)
mbhunter ♦♦
|
|
There are a couple of angles for this one: 1. From economics 101 the simple answer is supply and demand. Due to quality of construction (usually poorer than single family homes) & location (many mobile home parks are sub par), more people want single family homes than mobile homes. Simple- greater demand for single family homes EQUALS rising prices.Lower and declining demand for mobile homes EQUALS stagnant or declining prices. 2. Current market conditions, including lots of housing inventory and low interest rates (lowest in 50 years) also makes homes very affordable today. Welcome to Cash Commons Barb!
(Apr 06 '10 at 01:06)
mbhunter ♦♦
|
|
Besides demand, which is very important, housing goes up based on income. It's a real asset and it appreciates based on inflation and income. Because buyers qualify for loans based on a percentage of their income, housing prices rise with incomes. Whenever housing outpaces incomes for a period of time, housing prices must adjust (crash) back down. Thanks for stopping by, Bret, and thanks for your answer!
(Apr 06 '10 at 05:14)
mbhunter ♦♦
|
