Just like real estate, mobile and manufactured homes have numerable factors that determine value. We know location, condition, age of home, and surrounding areas all attribute to the equation. For this post, I will be speaking solely about mobile and manufactured homes that are on land lease property. This means that you own the home but not the land under it. You pay a space rent for the land the home is sitting on (this is how most mobile home parks in San Diego operate).
Because space rents vary, they play a huge factor in the value of the home.
A mobile home in a community or park with a space rent of $600/month would have a much higher value, with all factors equal, than a home in a community or park that has a space rent of $1,100/month. This is because the higher rent mobile home will cost $500 more a month and therefore would be a more expensive monthly investment.
The way we at Mobile Home Connection figure the price of a home is based off of a list of recent comparable homes sold in the same community. If we have a 2007 mobile home for sale in a certain park then we would take all of the 2007 homes give or take a year sold in that park in similar condition and divide the sale price by the square footage of the home. We use comparable homes within the same one year frame we are in because the market always fluctuates. To make this example more understandable, I will only be using three comparable homes for this, while in most cases I am able to reference many more.
Assuming that all of the homes are the same year and in similar condition and location in the park (these prices are based on a space rent of 700/mo):
Sales Price ÷ Square Feet = Price Per Square Foot
$100,000 ÷ 1,400 sq. ft. = $71.43 per square foot
$125,000 ÷ 1,500 sq. ft. = $83.33 per square foot
$85,000 ÷ 1,300 sq. ft. = $65.38 per square foot
After this we will figure out the average price per square foot for a 2007 house in this community.
$71.43 + $83.33 + $65.38 = $220.14 ÷ 3 = $73.38
So $73.38 is the average price per square footage for a 2007 manufactured home in this particular park.
Hypothetically, when going out to appraise a 2007 manufactured home that is 1,450 sq. ft. in similar condition and in the same park as the homes above, I would, multiply 1,450 sq. ft. by the average price per square footage, $73.38, which equals $106,401.
1,450 sq. ft. × $73.38 = $106,401
Everyone wants more than the current market determines their home is worth, so I will always offer my sellers an option to place a cushion on the home, as long as they agree to slightly lower the price if we get no offers in the first month. In a hot market like today (2016) we are receiving offers within five days of a listing providing the home is priced correctly.
Feel free to comment with questions
Written by Mobile Home Connection