Mobile Home Parks

Question:

Do you have any suggestions on adapting the data directly from your platform and into something I could apply to mobile home parks?  Or, do you find the mobile home parks are close enough to normal SFR that the data should apply the same?

Ken’s answer:

Mobile Home values closely correlate with SFR in each market.

In terms of ‘sensitivity’ to market changes/cycles, here’s how I would rank them:

(most sensitive/volatile) 

1.      Land

2.      Mobile Home Parks (“MHP”)

3.      Single Family Residential (“SFR”) 

4.      Multi-family (“MF”)

For example, land is typically the first to drop and the last to rise in a market cycle, and the percentage decline is more severe, compared to SFR.

 Next would come Mobile Home Parks (MHP).

I have not done a correlation analysis for MHP vs SFR because there are not enough MHP sale transactions in a given quarter, in a given market from which to generate accurate market-by-market comparison data.

This is similar to Commercial Real Estate in that there are also not enough transactions in a quarter in most metro areas to get a statistically valid sample size.

But here’s the cool part:

Many years ago, I WAS able to get some CRE data for a few very large metro areas and correlate that to HousingAlerts. Here is a summary of that finding:

https://www.housingalerts.com/blog/knowledgebase/predicting-commercial-real-estate-cycles/

What that correlation means is:

Even though no accurate quarterly CRE price data exists at the metro level, we can use our SFR data as a very good proxy.

The most interesting part for me was that using HousingAlerts (SFR data) actually gives even more lead time because CRE was shown to generally LAG the SFR market. 

 I have only been able to analyze “anecdotal” MHP data over the years, but without exception, it correlated closely to SFR. 

I believe the correlation of MHP vs SFR is even tighter than MF. I don’t know about the lag factor; it may be that SFR lags behind MHP a bit, as it does for land. If so, even more reason to keep a close eye on HousingAlerts!

 If you know of any accurate MHP price data, even if it were state or regional,  going back a couple decades, I would be happy to scientifically compute the correlation and lead/lag times, if any, with SFR.

In the meantime, I would use our SFR cycles as a close proxy for MHP cycles.