Manufactured home prices spike in Katrina's wake

By: WILLIAM FINN BENNETT - Staff Writer | Monday, October 24, 2005 9:22 PM PDT ∞

SAN MARCOS ---- It's not just the Gulf Coast that is feeling the fallout from Hurricane Katrina.

Two North County manufactured-home dealers say they are being forced to increase the price of their products to consumers by as much as 10 percent, as manufacturers pass along to dealers their Katrina-related cost increases in fuel and building materials.

"Almost every week, we are receiving price increases from manufacturers," said Sam Afolayan, regional manager for Advantage Homes in San Marcos.

He added that many of those notices of price increases cite Hurricane Katrina as the cause for the higher prices.

The most recent Producer Price Index report from the U.S. Bureau of Labor Statistics confirms significant price increases in building material.

In the month of September, the cost of plywood alone increased by 14.4 percent, according to the bureau's recently issued third-quarter report, called the Producer Price Index.

Between July 1 and Sept. 30, the cost of all building material jumped by 3.7 percent, triple the overall 1.2 increase in prices for consumer goods in the month of September ---- a 25-year record for that month. Wholesale prices, meanwhile, increased by 1.9 percent in the month of September, their largest increase in that month in the last 15 years.

Nationwide, fuel prices increased by 12 percent in September, according to the Bureau of Labor Statistics. Many experts have attributed that increase primarily to the damage caused to Gulf Coast refineries.

Pacific Manufactured Homes, a San Marcos dealer, has seen its prices increase by as much as 10 percent, said Sean Feeney, general manager for Pacific Manufactured Homes offices in San Marcos and Santee.

A typical 2,200-square-foot manufactured home installed on a buyer's lot that cost as little as $85,000 to $95,000 in August now could run as much as $95,000 to $105,000, Feeney said.

He added that another effect of Katrina has been increased wait times for his customers to receive their homes, as displaced Gulf Coast homeowners seek housing replacements and ratchet up market demand for manufactured homes.

"When factories have (that) much demand, customers have to wait longer," Feeney said.

He added that wait times have increased from about 30 days to as much as 12 to 16 weeks.

Many people waiting for their homes to be delivered are living in motels and other temporary living quarters, creating a hardship for many families, Feeney said.

"We look like the bad guys, (even though) we tell them that it's because of the factory," Feeney said Monday.

In the weeks after Hurricane Katrina struck, Feeney said he began getting requests to purchase the used manufactured homes that he often replaces with new units in this area. He has sold many of the secondhand units to investors and others who are buying them to transport to the Gulf Coast region to house those who lost their homes to the disaster, he said.

However, Feeney said, he has had to limit the number of used manufactured homes he sells to the Gulf Coast area, so he doesn't leave local buyers in the lurch. Among those local buyers are victims of the 2003 Cedar fire, many of whom still need units to replace their ravaged homes, he added.

"It's a difficult choice, very difficult; unfortunately, we need to provide replacements locally, as well," Feeney said.

It's "sad, because we can't be all things to all people, although we would like to be," he said.

Contact staff writer William Finn Bennett at (760) 740-5426 or wbennett@nctimes.com.

Sean Feeney of Pacific Manufactured Homes in San Marcos stands inside a manufactured home earlier this month. Demand and supply cost spikes caused by Hurricane Katrina have caused Feeney's company to raise manufactured home prices, he said./Waldo Nilo photo

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