Report: Tide Shifts for Manufactured Housing
Shares of manufactured-housing operators were the big-ticket stocks for real-estate investors in recent years, faithfully posting double-digit annual returns. But now, according to a Wall Street Journal report, some investors have soured on the sector.
Stocks of the biggest operators in the industry, Equity LifeStyle Properties Inc. and Sun Communities Inc., delivered negative total returns of about 2.4% and nearly 14%, respectively, in the past three months. That is a significant reversal from the past two years: Equity Lifestyle returned 22% in 2011 and 13% in 2010, while Sun Communities returned 20% last year and 86% in 2010, handily beating overall stock-market gains.
The falling fortunes of manufactured housing appear closely tied to the rising fortunes of traditionally built homes — and to mortgage rates. Sales of new homes have spiked in recent months and are on track to hit 368,000 this year, well above the 306,000 sold in 2011.
Meanwhile, shipments of manufactured homes are declining. In October, 5,100 new manufactured homes were shipped, down from 5,400 in the year-earlier month, according to the latest data available from the Census Bureau. September saw 4,400 shipments, down from 5,100 a year ago.
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