One slightly positive sign in MH is that the number of 1M+ sales seems to be picking up lately. It seems to be the tale of three markets. The high-end trophy properties are starting to budge finally and the low end is doing fine as usual. The middle of the road homes seem to be getting hit the hardest.

It seems like people who have 600-800k to spend are not satisfied with the school districts in MH. For the 1M+ buyer school district doesn’t matter because they are going to use private schools anyway. Finally, at the low end some properties are getting close to rental parity and moving for that reason.

What does this all mean long term? If you are a buyer in this area I believe it is imperative to try and purchase a property that would ultimately appeal to a high-end buyer. This is pretty much what we did back in ’09 by purchasing a major fixer on a trophy lot. Although we are satisfied with our purchase we certainly, like CONCHO, would lose money if we had to sell today.

If you can’t at least get a trophy lot then my advice would be to not buy until you can get very close to rental parity. I am afraid that the mediocre homes that are listed at prices way out of whack with local rents are going to ultimately get knocked down the hardest.