Homes of the West BLOG!

Follow-Up on the New Fire Regulations . . .

Homes of the West, L.L.C. — Tue, 15 Jul 2008 01:03:58 GMT

After I'm sure what was a firestorm (please excuse the un-intended pun) of calls, emails and correspondence from the Manufactured Housing industry on the proposed Emergency Regulations proposed by HCD (see "It Just Keeps Getting Tougher Every Day . . ."), the Department of Housing and Community Development has withdrawn its request of the Office of Administrative Law to implement the new Regulations on an emergency basis. The Department has issued an advisory notice to affected parties, however, that it does intend "to reissue the proposed emergency action at a later date." The Department also cautions Manufacturers, Wholesalers, Dealers and Consumers that until a State-wide preemptive regulation is adopted, any local government which has adopted an ordinance applicable to parks pursuant to Health & Safety Code Section 18691, or has adopted Chapter 7A of the California Building Code to be applicable outside of parks, may impose the new exterior fire resistive construction standards on Manufactured Homes installed within a Fire Hazard Safety Zone.

With any luck, the Department has withdrawn the proposed emergency regulations to first address the economic impact they would have on existing manufactured home inventory, and will re-submit them after a fair compromise has been reached. CMHI is working with the Department on these regulations, and will hopefully reach a compromise fair to all concerned.

"It Just Keeps Getting Tougher Every Day . . ."

Homes of the West, L.L.C. — Fri, 04 Jul 2008 02:04:22 GMT

The Steve Miller Band had it right - as if our industry – Manufactured Housing – wasn’t taking a hard enough beating lately, HCD recently sent Manufacturers, Dealers and Wholesalers a “NOTICE OF PROPOSED EMERGENCY ACTION”. On June 18, 2008, the Department notified all interested parties that it sought to implement new construction standards for manufactured homes (and other factory housing – collectively referred to as “MH”) that would supersede certain aspects of the HUD-Code for manufactured home construction.

First, a little history. In 1974, the Federal Government designated HUD as the government agency to oversee the Federal Manufactured Housing Program. Under that authority HUD implemented a series of laws designed to unify, or standardize the construction of Manufactured Housing across the country. Some regional variances were allowed to provide for extreme conditions, such as high wind speed, snow load and climate; but for the most part a manufactured home built in California could be installed in any state in the country. The rationale for this unified “HUD-Code” for construction was to streamline the industry by allowing factories to build for fewer regional variations, while protecting consumers by ensuring that all MH met a minimum set of performance-based construction standards. This set of laws is known as the Manufactured Home Construction and Safety Standards (“HUD-Code”), and until 2000 very little had changed in these standards. In 2000, P.L. 106-569, also known as the Manufactured Housing Improvement Act (the “2000 Act”) was enacted which amended the MHCSS. The 2000 Act also contains language which clarifies the original intent of Congress that Federal law preempt in the area of Manufactured Home Construction and Safety Standards, by providing that “Federal preemption . . . shall be broadly and liberally construed to ensure that disparate State or local requirements or standards do not affect the uniformity and comprehensiveness of the standards promulgated under this section . . .” 42 U.S.C. § 5402(d).

Unfortunately, even in light of the new preemption language contained in the 2000 Act, HUD and many states, counties and cities have taken the position that the HUD-Code only preempts construction and safety aspects actually covered in the Code. Therefore, locally enacted standards in many instances are not actually preempted by the HUD-Code. An example of where HUD, the State and many other jurisdictions have concluded that the HUD-Code isn’t preemptive are fire-sprinklers. At last count, 19 cities in the State require fire sprinkler systems in MH. HUD has concluded that the requirement is not preempted by the HUD-Code because they are “fire suppression devices”, not covered by Section 3280.201, which governs only “fire hazards” and “early detection devices.”

Why is this history lesson important – the Notice you may have received could dramatically impact your business. The action HCD proposed and passed is the emergency implementation of a new set of “exterior fire resistive construction standards” for new AND USED manufactured homes to be installed in “Wildland Urban Interface Areas” (www.fire.ca.gov). The State has imposed a portion of the construction standards from the California Building Code (for site construction – Part 2, Chapter 7A) on the construction/retrofit of MH. Chapter 7A covers construction standards and materials for items such as Roofs, Attic Ventilation, Exterior Walls (including windows and doors), Decking, Floors and Under-Floor Protection.

Anyone considering installation of a new or used manufactured home on land – private lot or land-lease community – in an area designated by the State Fire Marshall as a “Fire Hazard Severity Zone” (“FHSZ”), these new requirements apply to any MH not already permitted and installed by July 10, 2008. Existing dealer lot inventory will have to comply with these requirements or be installed only in areas not designated as a FHSZ after July 10. Given that the Department implemented this on an emergency basis – in 21 days – without significant public comment or discussion, the financial implications could be significant. There are presently millions of dollars of new MH inventory on dealers’ lots, none of which comply with the new Regulations. As such, those lot inventory homes will either have to be installed in non-FHSZs, or retrofitted. Factories are also scrambling to understand what the new law means to them, and how they can build homes that comply with the new California construction standards.

A question raised by many industry players is whether or not the State can adopt these construction standards in light of the Federal preemption in the area. As stated above, the HUD-Code has already been deemed not to occupy the entire field of MH construction, in spite of the clarifying language of the 2000 Act. In cooperation with CMHI, the Department posed that same question to HUD when faced with several jurisdictions who were trying to impose their own exterior fire resistive construction standards on MH. In early 2008, HUD issued a letter to the Department stating that exterior fire resistive construction standards are not specifically addressed in the HUD-Code, and therefore HUD opined that they were not preempted by federal law.

In spite of the surprise nature of these new regulations, ultimately, the change is one that will benefit the industry as a whole. In the short term, the effect on inventory and sales could be dramatic. Over time the emergency regulations will accomplish two things. First, our industry will be seen as being progressive and part of the solution. As I write this article, there are more than 1,000 wild fires burning in California. The economic impact of these fires greatly overshadows the burden of new regulations on our industry. The Department explained it to me like this; it would be hard to explain to a family whose life was destroyed by a fire that ignited an MH why we chose not to be a part of the solution. Second, since the implementation of Chapter 7A, jurisdictions around the State have been implementing their own brand of exterior fire resistive construction standards on MH. The MH industry, as set forth at the beginning of this article, thrives on standardization. While it is difficult for one state to adopt a substantial construction standard, it would be far worse to have 58 counties and 478 incorporated cities all with different construction standards for exterior fire resistive construction. The State, in concert with CMHI worked to develop a set of Statewide, preemptive construction standards to avoid the chaos that would have erupted in the industry if jurisdictions were allowed to implement their own regulations. We face a lot of challenges as an industry, including anti-closure ordinances, anti-conversion ordinances and growing resident activism, but these new regulations in the long run should not serve as an impediment to our business.

Huge Inventory Reduction Sale

Homes of the West, L.L.C. — Tue, 12 Jun 2007 17:06:52 GMT

We currently have ~~nine~~ (make that seven) new Manufactured Homes that we had originally intended to install in the Pioneer Pines Manufactured Housing Community, in Bakersfield California. As sometimes happens, our plans have changed, and we have decided at this time to sell those units. We would like to clear this inventory soon, so we may move on to new projects, so we have elected to let these go at our cost. Below is a link to a pdf file with a brief description of each home that is available, and the current price. If you would like more information, please contact Lorena at (661) 366-1100 or lorena.ascencio@homesofthewest.com.

To see our available inventory, please click HERE

Manufactured Home Community Subdivisions - Part I

Homes of the West, L.L.C. — Mon, 14 May 2007 22:50:37 GMT

What a hot topic this has become. My father, Jerry Gibbs (The Gibbs Law Firm, APC) is actually one of the pioneers in this field, and I have personally invested a ton of time over the past 15+ years in community conversions.

First, let's address the question of what is a "conversion"?

In it's truest sense, a "conversion" is any process by which the residents who live in a land-lease community come to acquire and control the operations of that community. This "conversion" from an investor-owed, land-lease community to a resident-owned community comes in a variety of forms:

Long-Term Leaseholds
Cooperative Purchases
Nonprofit Purchases
Air-Space Condominium Conversions
Planned Unit Development Conversions

The first of these, the "Long-Term Leasehold" is, in my opinion, the least favorable, and least effective conversion. This process is often advocated by "converters" (i.e., someone who is in the business of assisting residents in the conversion of their community) who seeks the benefits of more traditional subdivisions, but does not want to be bothered with the extensive work necessary to be performed at the Department of Real Estate to accomplish a subdivision. Also, even though there is much-hyped discussion of long-term financing for long-term leasehold interests in land, I know of only one project in California in which long-term leaseholds were able to obtain favorable financing, and that is because the project owner carried the financing himself. The idea is simple - the residents pay (either up-front, or through the lease) for a long-term lease (35 or more years). In California, a long-term lease is considered to be an "estate in property", though it also recognized as one of the lesser forms of interest in property. The residents of the community, by virtue of having a long-term lease to the space their home resides on, are considered to have a real estate interest in that space, and if the home is placed on a "foundation system", in theory the home can be converted to a fixture on real property, and in theory, financed as real property. The reality is that I am not personally aware of any lender willing to give "traditional" mortgage rates and terms on a leasehold interest (at least when it comes to residential, single family property), and as mentioned above, I am only aware of ONE project in which favorable financing was available, and that is because the community owner actually carried the financing himself.

The second form of "conversion" is the Cooperative, or Stock-Cooperative. In order of preference, this one is near the bottom, however, there are definitely times and situations in which this is the only viable option, and it does have benefits over NOT converting. In a Cooperative, the residents form an organization (typically, an exempt corporation - NOT a nonprofit corporation - meaning the corporation is exempt from State taxation, but is not a 501(c)(3) public benefit corporation, as there is no "public" benefit here). That organization, or entity then negotiates a purchase of the community from it's then owner. The residents generally have to put up cash equivalent to 30% of the total purchase price of the community in order for that entity to then qualify for, and obtain financing to purchase the community. The residents generally put up a portion fo that 30% each by either borrowing against their home, or as has been done in many communities, the residents can obtain an FHA Title I Home Improvement Loan to purchase an interest in the organization that buys the community. When the residents have purchased the community, the community is operated by that resident-formed entity. Each resident continues to lease their lot from the now resident-formed entity - with those members who put up funds and participated generally receiving more favorable terms on their lease, and/or longer terms. With smaller communities, less well organized communities, or where there is an urgency to completion of the purchase, the Cooperative purchase is the best tool available. Cooperative purchases can happen very quickly, and are not very costly (in terms of the conversion costs per space). The downside is two-fold. First, you still remain a land-lease community, so home financing does not change - it is still "chattle" mortgage financing at higher rates, with shorter terms and more difficult underwriting. Second, unless 100% of the homeowners participate in the purchase, this form of ownership immediately creates a split within the community of those who are members, and those who are not. In many instances, this division is a minor irritant, where in others, it can result in lawsuits and all the nastiness that the residents where trying to avoid by purchasing their community. While this can be a useful tool, it must be analyzed very very carefully, and all of the financial ramifications must be given their due consideration before going forward. I'll give you two great examples of where this has not worked:

In the 1990s, there were a string of Cooperative purchases advocated by a "conversion" company based out of southern-california. The conversion company first located parks which were probably not financially viable as Cooperatives, then took advantage of the residents in as many ways as you can probably imagine. Financially, the deals were structured in such a manner as to almost guarantee failure. In many instances, the residents paid far too much for the community. In virtually all of these communities, the residents who elected to participate borrowed roughly $30,000 each via the FHA Title I Loan Program, however, they were allegedly told by the converter that they were not personally liable for these loans (which was not true). The converter took commissions on both sides of the community sale (contributing to the price being too high), and the converter often managed the park after it was purchased. Unfortunately, in many of these communities, due to poor advice when purchased, and poor management after purchase, they ran into severe financial problems within a year or two of purchase. While we worked with several of these communities and residents to help put them back on solid financial ground, at least one ended up failing because the purchase was so poorly structured, and the resident taken advantage of so badly, that the community ended up being sold back to its prior owner, and the residents gave up ownership.

A second, and unfortunately fairly common problem involves communities sold to residents where the community operator did not own the real estate on which the community was located, but rather owned only a leasehold interest. When the residents of these communities formed an organization to purchase their park, they were often times not well informed about the nature of the leasehold interest they were acquiring (leasehold interest vis-a-vis the community), and down the road problems result from any number of issues, including lease terms, lease expiration dates (and the real estate owners unwillingness to sell the real estate), and financial problems which stem from uncertain lease terms (i.e., ground rent escalation clauses). Many residents who purchased communities subject to a ground lease are now coming up on the termination date for the lease, and are facing real estate owners who want to see the park closed because of the much-higher value of the land for other, higher density uses such as condominiums. This not to say that ground-lease Cooperatives DON'T work - we've been involved in a number of them, and so long as the residents have competent advice, and are fully aware of the potential pit-falls of this form of ownership, there is no reason this cannot operate just as successfully as a traditional Cooperative.

The third form of ownership, or conversion is a Nonprofit Purchase. There are a lot of different flavors of this running around. The most common of these is where a qualified nonprofit organization (an entity which has been qualified both by the State and the Federal Government as being a public-benefit nonprofit 501(c)(3) entity) purchases the community for the benefit of the residents. This is not true "resident ownership" and in many cases, simply results in a change of ownership, with little or no benefit to the homeowners. Do not confuse "Nonprofit Purchases" with the use of a nonprofit entity as an accomodator of a full subdivision sale - this is discussed in more detail below, but in some cases a nonprofit may be involved only to accomodate the sale of the community from the owner, to the individual residents, and does not result in long-term ownership by the nonprofit. As stated above, the Nonprofit Purchase is not true resident ownership - the nonprofit buys, owns and manages the community. The better nonprofits will form a board on which the residents and directors of the nonprofit sit to address management issues. The goal of nonprofit ownership is to preserve the community as a stock of affordable housing - in theory the nonprofit has no profit motive, can actually get a break on property taxes and other expenses related to operation, can obtain in some cases better-than-market financing which reduces the cost of operation of the community. In a good nonprofit purchase, these operational savings are passed on to the residents in the form of either lower, or at least stabilized rents. Unfortunately, there are (as with everything) some bad players in this field. Their nonprofit may purchase the community at a better-than fair market price, giving the community owner a big bonus, but leaving the residents to pay that additional cost. Also, there have been some promises made by nonprofits that at the pay-off of their financing, they will give the community to the residents for $1. To do so would be an improper use of the assets of the nonprofit - unless they transfer it to another qualified nonprofit, OR they sell it to the residents, they are probably in violation of the law. Just remember that when it comes to a nonprofit purchase, the community residents are in most cases simply changing from one landlord to another, with hopefully, and at best, a slight stabilization of their monthly housing costs.

In my next installment I'll cover the two more-favorable forms of resident ownership/conversion - Condominium and Planned Unit Developments. Come back soon for more information . . .

That's A Manufactured Home?

Homes of the West, L.L.C. — Mon, 30 Apr 2007 20:44:35 GMT

Recently, there has been an increasing awareness of the value in Manufactured and Modular Housing in the news and other media. The Orange County Register ran an article Sunday, April 29, 2007, about the future of manufactured housing. Essentially, the article pointed to two factors which make manufactured housing more attractive. First, the shake-down in the sub-prime mortgage industry is leading to a couple of simultaneous events. Not only are there going to be fewer active players in the sub-prime mortgage industry, but it may become more difficult to qualify for a sub-prime mortgage in the future. Additionally, due to some questionable underwriting practices, the author of the article expects to see higher default rates, and in turn, more people looking for a more affordable form of housing. The article's author pointed to manufactured housing as a possible salvation for those who can no longer enter, or are foreclosed-out of the traditional real estate market. The second point - that people foreclosed out of traditional markets can simply "slide-down the ladder" into MH is not at all accurate - the shake-down in the traditional real estate markets might help manufactured housing, but not because it is easier to qualify for a manufactured home mortgage - to the contrary, until recently, it was definitely easier (assuming you had sufficient income to cover your mortgage) to qualify for a traditional, site-constructed mortgage than for manufactured housing.

Second, the article points to the rapidly-changing demographics of our population. Thanks to the "Baby-Boomers" generation, more and more of Americans are in the upper-age categories than ever before. That means more people retiring, and more people on fixed or limited incomes. The author points to manufactured housing, again, as a source of more affordable housing. I agree with this point, but for different reasons. Those approaching retirement these days are well equipped to live a long, fruitful life. They are not strapped by an income fixed to increases in Social Security - many of those retiring in the next 10 years won't even consider Social Security as a part of their retirement plans due to uncertainty in the program's future. In other words, those retiring now and in the future should be more financially stable than ever before. That does, however, mean that they will have active retirements. RV travel is a high priority (look at how many more mega-dollar motorhomes you see on the road today than in years past) for many who want to retire and see parts of the country that they were too busy in their working lives to visit. What this lifestyle typically means is that their "primary home" will become less of a primary home, and more of a "home base" for their active travel lifestyle. For many, this will mean a desire to give-up their 5,000 sq. ft. home in favor of something more manageable while they travel. Manufactured Housing offers a reduced overal cost of living, but also has the advantage of less upkeep and maintenance. Most communities feature smaller lots, which means little or no landscaping upkeep. Further, living in a manufactured housing community offers the advantage of much closer neighbors who will keep an eye on things while you're gone. In all, I agree with the comment than an older population bodes well for manufactured housing's future.

Now, what about the title of this Blog? Well, also this past weekend, there was a special on HGTV called Amazing Log Homes. Unfortunately, the website article isn't nearly as comprehensive as the show was, however, there is a good slideshow of the homes featured in the show here. Believe it or not, slide three is a Modular Log Cabin built by Blue Ridge Log Cabins in South Carolina. The homes are constructed as "Frame-Off" modular homes, meaning that when the home is placed and finished on-site, the steel frame upon which it was transported is removed entirely. The comments in the show were that "even the inspector did not believe it was a modular home". Unlike some of the HUD-Code homes made to look like log cabins, this is a home built just like log-cabins site-constructed, however, it is built in modules, trucked to the site, and assembled with cranes. According to Blue Ridge's website, constructed time is halved by use of modular construction. Their product is amazing, and is something I would personally love to see replicated on the West Coast.

Additionally, I received some pictures recently from a friend Boyce Belt of Santiago Financial. They have been installing homes in a land-lease community "Mountain View". This is a five-star community, and according to Boyce, it is undergoing a substantial change as people are pulling out older homes and installing new ones. Below are a couple of great pictures of a home his company recently finished, and is currently available for sale. Boyce can be reached by email at bbelt@santiagofinancial.com or by phone at (714) 731-8080. While this home retains some of the manufactured home appearances, I think we can all agree that this is someplace many would choose over a site-constructed home any day.

Energy Efficient Manufactured Homes

Homes of the West, L.L.C. — Fri, 27 Apr 2007 22:35:31 GMT

Did you know that you can purchase a manufactured home which is actually earned the Energy Star rating? It's true - the manufactured and modular industry is one of the first "early adopters" of the whole-home Energy Star rating. According to the Manufactured Housing Research Alliance ("MHRA"), citing a study performed by Owens-Corning (a vendor to the industry), the average homebuyer would pay an additional $2,869 for an energy efficient home, while most manufactured home retailers who were surveyed believed that consumers would only pay an average of $1,394. This statistic is very important, because the actual cost from the manufacturer to take a standard home plan, and make it Energy Star qualified, is greater than even the higher figure acceptable to the average buyer.

In addition to cost, 85% of those buyers surveyed are willing to pay more for an energy efficient home. 85% of those surveyed believe that an energy efficient home means a better quality home, and finally, 82% of home buyers surveyed felt that buying an energy efficient home was important. According to the US Department of Energy and the US Environmental Protection Agency, Energy Star qualification means:

Savings of between $25 and $90 per month in home operating costs;
Greater Customer Satisfaction;
Parity with or Even Better Than Site-Constructed Housing;
Energy Star verified by an independent third-party;
Government Backed;
Higher Resale Values;
More Comfortable Living.

In some States, utility companies actually offer rebates of up to $750 for the purchase of an Energy Star qualified home. Here in California, if you are a Southern California Edison customer, you can obtain a $450 rebate for the purchase of a new, Energy Star qualified manufactured home that is gas-heated, or a $750 rebate for an electric-heated Energy Star qualified new manufactured home. Other jurisdictions participating include Nevada Power Company, and Tennessee Valley Authority.

If you are interested in learning more about Energy Star certified manufactured homes, please check out the Manufactured Housing Research Alliance's website at www.mhrahome.org. There are some really useful resources on the website including an informative video and power-point slideshow.

Thanks again for checking in - keep checking back - there is more to come!

Pioneer Pines Park

Homes of the West, L.L.C. — Thu, 26 Apr 2007 18:52:16 GMT

I must apologize - it has been a few days since I've had a chance to post to the Blog! Over the weekend I'm going to try (now that I have Windows Live Writer up and running) to post several to catch up. On to today's topic . . .

As our website explains, we are working with the owners of the Pioneer Pines Park manufactured housing community in Bakersfield, California to fill vacant spaces with new homes. We started this project a few years ago, and have been very successful in helping to turn the community around. The community's history is that at one time, it was owned by a relatively "absentee" owner. The park had not been well managed, and little investment had been made to the infrastructure. We were first asked by The Associates Group for Affordable Housing to start a new home sales office and start filling the park after TAG had purchased and partially rehabilitated the community. TAG had spent a couple of years, and close to two million dollars rehabilitating the community after it purchased the community from the absentee owner. TAG was able to get about 90% of the rehabilitation completed, however, it struggled with higher-than-expected vacancy rates, and governmental oversight of the project due to its unique purchase financing. In the end, TAG decided to sell the community, and completed that transaction earlier this year.

The new community owners are very excited at the prospect of completing the rehabilitation that TAG started, and continuing to fill the community with new homes. We continue as the on-site home sales office, and are very excited to be working with them. The project certainly has changed since we first started, and with the new ownership's committment to making the park an "Oasis", I'm sure their finishing touches will simply make the project the best land-lease community in the Central Valley market.

Below are some renderings - you can check out the larger images in our Gallery - just follow the links to the Pioneer Pines Park In-Park section.

The most exciting news to add here is the fact that we are finally starting work on completing our five display models! In very-short-order, we'll have five fully completed display models available for preview and purchase. We've complete a large number of homes in the community, however, we have almost always sold the home prior to completion, so we've not had any available for display. Below are pictures of the homes in-process of completion. The Display Models will be located at spaces 16, 18, 90, 167 & 197. All are three bedroom, two bath except space 197 which will be a four bedroom, two bath. Please call Claudia or Lorena at (661) 366-1100 for more details.

Space 16 - Cavco Durango Limited Edition model CLE-5620C with a factory-installed porch. We'll be landscaping this home soon! I'll post more pictures shortly.

Space 18 - Cavco Durango Limited Edition model TAG-1280A with a factory-installed porch. As with 16, we'll be landscaping this home shortly, and I'll post pictures.

Space 90 - Cavco Durango Limited Edition model TAG-1280A with a factory-installed porch. We'll be adding the carport awning, landscaping and steps over the next week or two.

Space 167 - Cavco Durango Limited Edition model CLE-5224B with a factory-installed porch. This home is just now being setup, and will be completed over the next 20 or so days. This is a great home, in a great location!

Space 197 - Cavco Durango Limited Edition model SSS-5428A - the big four-bedroom bad-boy! This home is also just now being setup, and will be completed over the next 20 or so days. Again, great home for those needing more rooms, and in a perfect location near the clubhouse, pool, spa, etc....

Thanks for checking in today - I promise more good information to come - please check back often!

David

MHI Congress & Expo - Part I

Homes of the West, L.L.C. — Fri, 20 Apr 2007 18:54:42 GMT

This past week, I attended the 2007 MHI Congress & Expo for Manufactured and Modular Housing. I'm proud to say that Homes of the West, L.L.C. was a Silver Sponsor of this event. The event is a national congress and trade show for the industry, and is held each year in Las Vegas. Today I'm going to focus on two speakers from the event who presented compelling arguments for change in our industry. Currently, there is a lot of turmoil in the housing industry, and Manufactured & Modular Housing is not exempt from these forces of change. With the real estate economy changing (I won't say that the housing economy is in recession nor a "slump", because I personally do not believe the "expert analysts" who are predicting doom & gloom - there are many bright spots ahead in the marketplace), our industry needs monumental change.

Manufactured Housing, (less so Modular Housing) is an industry poised to go one of two directions. Like a dinosaur, it can lumber along down the same path it has always followed, or it can turn direction and move to join the myriad other housing options as a viable, affordable, attractive option. If the industry does not heed MHI's call for change, it could become, like the dinosaurs, a dying breed. The statistics bear-out more than just a negative change (i.e., "slow down), the production and delivery numbers have dropped more significantly than if it were just a reflection of the general downward change in housing in general. The numbers are kind of staggering - MHI reports that for February 2007, shipments of homes were down 38.8% for all surveyed areas from February 2006. Additionally, in the West North Central Region, shipments were actually down 49.9% and in our Region - the Pacific Region, shipments were down 40.5%. California, in particular, reported shipments which represented a drop of 46.6%.

So, what happened??

The changes in my opinion, are attributable in part to the actual housing market changes (i.e., "slow down"), and in part to consumer perception of the housing markets - enough negative media can actually exert its own forces on the market, and in part to problems with financing of manufactured homes - during the prior year, many lenders exited the market including Greentree Financial, but perhaps most important is a change in consumer perceptions of the industry as a whole. As the market started changing, consumers of housing product changed - they became better educated about their choices; traditional stick-built housing developers have offered more service, more product and all for lower prices and in some cases, captured buyers who might have otherwise been attracted to Manufactured and Modular Housing because of the price differential. Additionally, for traditional site-constructed homes, buyers are able to qualify much easier, and on better terms than MH, which has created an imbalance, and a loss of true "affordability" within Manufactured Housing.

What Needs To Change??

To paraphrase the message of Blake Ashdown of SureVista Solutions (www.surevista.com - bashdown@surevista.com - a sales and marketing consulting firm) delivered to the MHI Congress this past week, the focus of business needs to be different from the traditional "Sales Era" focus which prevailed until the 1990's. Unfortunately, the Manufactured Housing Industry has been stuck in this "Sales Era" way of doing business up to today. The focus in Manufactured Housing has been so long focused on "the sale" and "closing the deal" that the industry has completely missed the most recent change in business focus - the customer. To survive, the Manufactured Housing Industry has to change it's focus from selling a product, to creating an experience for the customer. Many manufacturers have begun or are fairly-well entrenched in increasing their Customer Satisfaction Index, however, that message hasn't completely trickled-down to the home retailer yet, and many new home buyers still have very difficult experiences with the retailer from whom they purchase a new home.

We at Homes of the West, L.L.C. recognize this need to change, and following the direction of national and local trade organizations like MHI, have launched a new Customer Satisfaction Campaign. Over the coming weeks, I'll be posting more details about the program, and what it means to our clients.

The second speaker I want to discuss is Joseph C. Adams, PHC^® of The Housing Marketplace, Inc. (www.TheHousingMarketplace.com - jadams777@bellsouth.net - a major provider of sales and marketing services for builders and retailers). Joseph delivered a message at the Congress which was quite inspirational. He too focused on the need to change the way Manufactured Homes are sold, and agreed that change needed to come in the form of more focus on the customer's experience, rather than a focus on selling this home, or that home. Joseph focussed on seven key points for building a better sales organization:

Take Risks
Display Professionalism
Radiate Energy
Exude Enthusiasm
Perform with Passion
Develop a Plan

I've begun the process of incorporating these key values into our new Customer Satisfaction Campaign - while many of these might appear to be similar, they are distinct, and as discussed above, I'll flush this out more thoroughly in the coming weeks.

As always, thank you again for tuning in, and keep coming back - there is a lot more to come.

Welcome to Our BLOG!

Homes of the West, L.L.C. — Thu, 19 Apr 2007 23:03:11 GMT

Well, it has taken some time, but we are happy to report that our BLOG! site is finally up and running. It took a lot of work, however, we believe that this will be a great tool for visitors to our site. We will do our best to post information at least Daily, with our focus being on Manufactured and Modular Housing.

We have a lot to start off with, so I'll just cover the highlights here, and post more entries in the coming days with more details. What are the first things we hope to cover? Check it out...

Homes of the West, L.L.C. was a Silver Sponsor of the 2007 MHI Congress & Expo for Manufactured and Modular Housing in Las Vegas. I just returned from the show and Congress and have A LOT to cover in coming days.
We are excited to report that our new site is just about two or three days away from being completed and posted - it will include our new BLOG! as well as many other really cool features.
We are getting started on completing our first five display models in Bakersfield, CA at Pioneer Pines Park - this is a big project, and we've struggled to get display units ready because most inventory is sold before we can even finish it. This will be a big attraction for homebuyers in the Central Valley come May/June - just in time for the Summer!
Finally - one or more of the Nonprofit (aren't they all nonprofit?) projects we've had on the books for a year or more are just about ready to start. We've had some difficulties getting this latest round of projects started - primarily due to entitlement issues, however, it looks like were "a go" for the first two homes in the Inland Empire. I'll post more details as they are available!

I don't want this to be too long, so I'll sign-off for now. I can't tell you how excited I am to finally have this tool available to help our customers and clients keep abreast of developments in the Manufactured and Modular Housing industry.

PLEASE do return frequently - we'll keep posting as long as you keep visiting!