Economists estimate that home prices will rise 4.7% in 2013
and that’s on top of estimates that home prices climbed 6.4 percent last
year. That’s more than an 11% increase in just over a year. With costs
rising at modular home factories, how long can some factories continue to not
raise their prices and/or offer discounts?
This upward revision to home prices was attributed to three
key factors.
- Momentum – the faster home prices turn, the more
people believe they will continue to rise. - Depleted used and new inventory.
- Credit availability.
Another factor that is helping the higher number of housing
starts is the rental market.
Over the past few years vacancy rates have plunged and rents have increased in
the rental market. But the recovery in the housing market shouldn’t prevent the
rental market from doing well.
There are a few “cyclical and structural factors”
underpinning the rental market.
- Credit conditions are expected to ease but are still
historically tight. - The knowledge that home prices can and do fall.
- Households looking for mobility prefer to rent.
- Public policy is evolving to consider affordable renting
options as well as affordable homeownership.” - “Aging population supports rentals.
- Investors have engaged in REO-to-rental programs.
Modular home factory sales reps need to work with their
builders to help find and work with local small developers that want to enter
the rental market. It’s a huge underdeveloped market for modular builders as a
lot of the sales to these developers is made directly through the factory sales
staff.
