Housing alternatives are popping up more and more as costs for traditional homes soar.
Surge in Lower-Cost Housing Alternatives
The people who will be working in Elon Musk’s soon-to-be-completed $1.1B Tesla Gigafactory in Del Valle TX, just 15 miles from Austin, have been franticly looking around for houses in which to live. The problem for these workers, and other production workers throughout the country, is the cost of housing.
According to Zillow, the median price for a single-family home across the Texas capital has soared +54% since January 2020 to $525,000.
It’s simply not possible for a “middle-skill” assembly-line worker (most likely a worker who has children) with an average annual salary planned by Tesla to be just under $50,000 can afford to buy and maintain the costs of a $500,000 home.
No wonder workers in the Austin area, as well as workers in Los Angeles, Chicago, Boston, Phoenix and Salt Lake City, are clamoring for lower-cost housing alternatives.
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Non-Traditional Housing Getting Fresh Looks
Low-income households, Millennials and households of color are beside themselves looking for developments of manufactured homes, recreational vehicle resorts, 3-D printed houses, tiny houses, you name it.
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According to Bloomberg, “…it’s hard to find a city that’s had it worse than Austin, where a booming tech industry and loads of newcomers from the coasts have combined to push up prices.” Since Q1 2020, price appreciation in Austin (+54%) tops home price appreciation in any of the largest metros in the US.
The good/bad news for Austin is that this metro has some, but definitely not enough, camper and RV sites and resorts, mobile developments and tiny home communities. Due to unprecedented demand, more are coming next year. Additionally, homebuilders Icon and Lennar Corp. are constructing the world’s largest neighborhood of 3D printed homes just outside of Austin.
Berkshire Hathaway’s Clayton Homes division and Sun Communities Inc. have already built and will build more new mobile-home parks to expand their respective multiple developments. Sun Communities, a publicly traded company valued near $23B, intends to plow some $500M into 60-70 mobile home developments across the country in 2022, twice the amount the company is spending in 2021.
According to Sun Communities’ CEO John McLaren, “When you widen the radius and look beyond Austin, it’s really happening everywhere in America.”
Costs of Mobile Homes
Even though companies producing manufactured homes tout prices as low as $60,000, the minimum prices comes out to be around $90,000. Clayton Homes indicates that its top-end four-bedroom unit with a soaker tub, solid wood kitchen cabinets, recessed lighting, energy efficient windows and a walk-in closet runs $140,000.
Thanks to Bloomberg.
