Several major RV manufacturers also are significant producers of manufactured homes, but the manufactured housing industry has a long way to go to work itself out of its self-inflicted slump, according to a recent Wall Street Journal (WJS) article.
The manufactured housing industry’s slump began in 1999 and was the result of over-production, which was encouraged by easy credit, according to the WSJ article.
Since then, the industry’s inventory has been reduced to 111,000 units, from 166,000 units, but the industry’s difficulty is expected to continue because the economy has cooled, reducing the number of potential retail buyers.
Compounding the problem is the fact several lenders have stopped financing retail purchases of factory-built homes. The repossession of 75,000 units also added to the excess inventories at the retail level.
Kevco Inc., a supplier/distributor that served the manufactured home and RV industries, has, so far, been one of the casualties. It is being liquidated under U.S. bankruptcy court supervision.
One analyst quoted in the WSJ article said that if the economy falls into a “steep recession,” then half of the publicly traded manufactured home companies might have to file bankruptcy.