RealEstateNews4.28.25

Weekly News Roundup

• Mobile Home Boom
• Florida’s Bifurcated Condo Market
• San Francisco Office Market Improves

Mobile Home Boom 

Mobile home investing is an unsexy, little-known sector meeting a nearly bottomless demand, and earning some of the best returns in the housing industry. Its low price of entry is allowing an entirely new crop of entrepreneur — many of them Black, as the Sellerses are, or coming from very modest backgrounds. (A 2021 survey by the National Association of Real Estate Investment Managers found that 73 percent of industry workers are white males.) With housing costs rising across America, many mobile home flippers are finding the opportunities so plentiful that they’re now training other wannabe real estate moguls in the practice, earning a significant chunk of their income from mentorships and tutorials that help more people like them enter the field.

While they don’t get a lot of attention, mobile homes — “manufactured housing” per marketing and policy wonks, or “trailers” in other circles — are the country’s biggest source of unsubsidized low-income housing, providing shelter to 21 million Americans. As the nation’s housing crisis grows, they’re becoming increasingly attractive to people who can’t afford a traditional site-built home. Between 2014 and 2024, the number of new manufactured homes shipped across the country increased by over 60%, according to census data.

They’re cheap in part because the selling price rarely includes land; most buyers pay only for the structure. They’re also factory-built, benefiting from economies of scale. And unlike stick-built houses, mobile homes are classified as personal property, like cars, which results in lower property taxes and home insurance costs. Historically, they’ve also depreciated like cars. But that’s changing in today’s housing market. A few months ago, LendingTree reported that between 2018 and 2023 the average sales price of new mobile homes went up by almost 60%, to $124,000 from $78,000. And the Urban Institute found that while there’s more volatility in the manufactured housing market and location matters, the homes generally appreciate much like site-built properties, at about 5% a year.

The sector’s high returns are often characterized by desperation. Facing a lost spouse or job or some other hardship, sellers are often willing to dispose of a home cheaply because they need the quick cash. Buyers are hungry for something, anything, they can afford. They aren’t looking to build equity; they’re seeking shelter, at a time when both conventional homeownership and rentals have soared out of reach for many. Mobile homes exist in an alternate reality, one where a home purchase can be completed in a day without the help of attorneys or appraisers, where the cost of a used unit floats depending on its actual value to the buyer and seller. Source: Business Insider

Florida’s Bifurcated Condo Market  

Florida is contending with a condo crisis for properties 30-years or older, while newer properties rise in value. The collapse in the value of older buildings reflects new requirements for making sure they are structurally sound after the partial collapse of a Miami building in 2021 killed 98 people. A combination of insurance increases, special assessments and limited financing options have elevated costs beyond what many are able to bear. 

That has sparked a wave of sales, flooding the market and straining prices. The selloff is concentrated in older properties. Even in South Florida, prices for buildings 30 years or older have depreciated 22% in the past 24 months, according to ISG World, a South Florida real-estate firm. By contrast, condos less than 30 years old have appreciated an average of 12% over the past decade. 

South Florida condominiums enjoyed one of the biggest real-estate booms in the country for years. Median condo prices in Miami-Dade County were up 8% in February from the same month last year and more companies are relocating to Miami, West Palm and other South Florida cities. But those areas are outliers. Condo prices in the state of Florida overall have fallen between 1% and 6% each month annually since July 2024, according to Florida Realtors. In February, prices were down 3%. Source: Wall Street Journal

San Francisco Office Market Improves  

A vacant downtown San Francisco office building has sold for $111.3 million in one of biggest office sales since the pandemic, according to property records. The office tower at 199 Fremont St., which is being rebranded as 300 Howard St., was sold to investors DivcoWest and the private equity giant Blackstone. It’s evidence of increasing investor appetite in the area, which was emptied out by remote work. 

The new owners plan to renovate the early 2000s tower in hopes of attracting artificial intelligence companies with a new conference center, lounge and gym. DivcoWest already had a 49% stake in the building with partner CalSTRS. Other previous owners included an AFL-CIO pension fund and Manova Partners. The 25-story, 420,000-square-foot building sold for around $265 per square foot, far less than the roughly $900 per square foot that Divco and CalSTRS paid in 2020 for its previous stake. Source: San Francisco Chronicle