Mobile home madness: Prices top $1 million

Discussion in 'Economics' started by trader99, Jul 6, 2005.

  1. trader99


    Trailers selling for $1M?! Things are getting out of hand...

    The crazy California real estate market has come to this: a million-dollar trailer.

    A two-bedroom, two-bathroom mobile home perched on a lot in Malibu is selling for $1.4 million. This isn't a greedy seller asking a ridiculous amount no one will pay. (Photo gallery: Mobile home boasts of spectacular views)

    Two others sold in the area recently for $1.3 million and $1.1 million. Another, at $1.8 million, is in escrow. Nearby, another lists for $2.7 million.

    "Those are the hottest (prices) I've ever heard," says Bruce Savage, spokesman for the Manufactured Housing Institute. He says prices in another hot spot, Key West, Fla., top $500,000. As if the price isn't tough enough to swallow, trailer buyers:

    Don't own the land. As with most mobile homes sold in Malibu, the land is owned by the proprietor of the trailer park, in this case, Point Dume Club.

    Still pay rent. Not owning the land means paying what's called "space rent" that is as high as or higher than many mortgages in other parts of the USA. On the $1.4 million trailer, space rent is $2,700 a month.

    Can't get mortgages. Since the buyers don't own the land, most of the mobile homes are paid for in cash or with a personal property loan that usually amounts to $100,000 or less, says Clay Dickens, mortgage loan agent at Community West Bank.

    Why would anyone pay seven figures for a trailer? It gets you more than the typical mobile home. The $1.4 million trailer is in a gated, guarded community with a shared tennis court and panoramic views of the Pacific Ocean. It also is on a larger-than-usual "triple-wide" lot.

    Buyers are willing to pay such prices just to get into Malibu, where the average list price is $4.4 million, says Coldwell Banker broker Rick Wallace.

    But, it's still a trailer with a modest kitchen and faux wood floors. Many still have trailer hitches attached.

    Sellers couldn't be happier. Charley Chartoff, a 29-year-old Coldwell Banker Realtor, is selling the $1.4 million trailer after living there about three years. Chartoff won't say how much he paid, but neighbors say prices have climbed about threefold in that time.

    Developers are partially driving the rise. Janet Levine at Maliblue Holdings has bought several old homes and is installing high-end "mobile villas" to put up for sale. Levine and others bristle at the term "trailer." To be permitted in the park, the home must be perched on piers (a high-end version of up on blocks).

    Some neighbors, though, can only marvel at the prices. Longtime resident Jim Schwartz, 92, says he got an $800,000 offer for his trailer home, which is not for sale. He declined. But, "You come to me with $1 million, and we'll talk about it," he says.
  2. The same person buying that trailer bought used trading books here on ET.
  3. TGregg


  4. Always fools and suckers out there.
  5. Samson?
  6. no, wait..........yes, IT'S STILL A MOBILE HOME!!!!!!!!:p
  7. location, location, location.
  8. trader99


    If this is not the sign that we are near a major top in the RE market, then I don't know what is! It's SCREAMING with RED FLASHING LIGHTS. What would it take for people to heed warnings signs? For God, himself to descend from Heaven and tell people to watch out! Even then people wouldn't listen.

    At the every major top, you always hear outrageous things. Like a price target of $1000 on QCOM. And it ran up 200pts in a week. Or profits are not important during the dot-com era. Or tulips are worth more than houses during the 1600s.

    oh well. Should be interesting to see things unfold. But the trend is too strong to bet against now.
  9. TGregg


    The best part is, I can imagine Bubba up in the mountains reading this and thinking "Shiiiiit! We'all's millionares!"
  10. I am completely speechless.....what can you say??? You dont even own the land?? still pay rent as high as 2700??? :eek:
    #10     Jul 6, 2005