Affordable NJ mobile homes? Here's what you need to know, but don't expect bargains

MANCHESTER - Miguel Lopez recently listed a mobile home at Pine Acres Manor for $175,000 and wondered if that would be too high for a community known for its affordable housing.

But within four days, Lopez received at least five offers. The mobile home sold for $10,000 above its list price. And Lopez has to tell buyers who missed out on the home that they will need to keep waiting.

"Even if it's a mobile home, they'll go $10,000, $20,000 over asking," said Lopez, an agent with NJ Elite Group Realtors in Asbury Park.

Mobile home communities at the Jersey Shore are seeing prices for the homes themselves and the rent for the properties increase sharply, a new report has found, diminishing the affordability of an option that long has been available to low- and moderate-income residents.

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The report comes as New Jersey searches for new ideas to increase the supply of affordable housing. One idea: Policymakers could take steps to keep the rent under control.

The parks, often thought by the public to be rural, are "actually part of metropolitan areas and are subject to the same kinds of market pressures that I think a lot of the housing in those metropolitan areas are subject to," said Eileen Divringi, community development research manager at the Philadelphia Federal Reserve Bank. "And that sort of feeds into why it's important to be proactive about thinking about preserving the affordability of these communities."

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Hard to find mobile homes

Victor Vega didn't initially consider looking for mobile homes, mainly because the units are side-by-side, forcing him to give up the open space that drew him from Brooklyn to Jackson, where he lives with his girlfriend and their three children.

The 34-year-old construction worker, however, said rent is $3,400 and going up fast; this year it increased $200 a month. So he has been trying to buy a home, figuring it would be more affordable and he could build equity. With prices for single-family homes soaring, he turned to mobile homes, only to find prices escalating there, too.

Is he finding anything available?

"Not at the moment," Vega said.

Mobile home residents have a unique arrangement. They typically own their home and lease their property from the community's owners. It traditionally made for an affordable option. In 2000, the median price of a mobile home value was $30,500, compared with $167,900 for other housing types, according to the New Jersey Manufactured Housing Association, a trade group.

But the pandemic sent the Shore's housing market into a frenzy as buyers fled New York City and other densely populated places in search of safety. And with the supply of mobile homes essentially flat during the past 20 years, the average price of a new mobile home in the Garden State jumped from $87,300 in 2017 to $129,500 in 2022, or 48.3%, according to LendingTree, a mortgage company.

Pine Acres has seen the shift. The community on Route 37 advertised mobile homes for $4,500 in 1975. Now, with 250 units and an occupancy rate of upwards of 90%, homes there are on the market for $175,000, and attracting multiple offers.

"Every day I have a walk-in, usually," said Christina Ciampa, Pine Acres' manager. "I just called someone back who is looking for homes under that $200,000 range. It just seems what people can afford to live in Ocean County."

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Risks for mobile home buyers

Divringi from the Philadelphia Fed said residents in mobile home communities face other risks.

Among them:

• Rent is rising. Even if owners buy their mobile homes in cash or lock in fixed monthly mortgage payment, they need to keep up with rent. The average rent in the Northeast was $570 a month in the second quarter of 2023, up 4.4% from the same time the previous year, according to a report by Fannie Mae. (Pine Acres' Ciampa said that community is subject to Manchester's rent control policy).

• Homeowners can be displaced if the property owner decides to close the community. Moving a manufactured home is expensive.

• Residents often can't obtain a standard mortgage to purchase their home or borrow against home equity because New Jersey and other states consider manufactured homes as personal property instead of real property. It leaves them to turn to so-called chattel loans, which have higher interest rates and fewer consumer protections.

Divringi noted that unlike New Jersey, Pennsylvania and Delaware provide relocation assistance to residents who are displaced from mobile home communities when they are sold or are redeveloped.

In New Jersey, "manufactured housing, both inside and outside of (mobile home communities), is recognized as a contributor to the affordable housing stock, and some communities have proactively sought to preserve (the communities) as a strategy for meeting their fair share requirements," she wrote. "However, there is little indication to date that this has led to support for expanding (the communities) as an affordable housing strategy."

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Lopez said the demand remains steady. He listed another mobile home at Pine Acres Manor for $174,000 and received multiple offers on that as well. A 30-year mortgage with an interest rate of close to 7%; a down payment of 20%; and the rent of $517 adds up to a monthly housing payment of $1,430.

He had to turn buyers away.

"I feel bad," Lopez said. "It's heartbreaking because they want a better place, they want to better themselves, and they just got rejected. It's sad. I wish we had another development or another mobile home."

Michael L. Diamond is a business reporter who has been writing about the New Jersey economy and health care industry for more than 20 years. He can be reached at mdiamond@gannettnj.com.

This article originally appeared on Asbury Park Press: NJ mobile homes are more expensive; here's what you need to know