In November 2016, shares of UMH Properties Inc. hit a new 52-week high of $13.50. UMH, a real estate investment trust, has been operating as a public company since 1985. The market cap is now $366.6 million.
UMH’s growth is apparent when you review the last five years. In 2011, UMH had 40 communities and 8,900 developed sites. That has grown to 100 communities and 18,000 developed sites in 2016—more than a 100% site increase. Further growth is envisioned with approximately 1,300 acres of land that can be used for the development of new sites. From 2016-2020, more than 1,050 sites are planned for expansion. Additionally, rental unit growth is up more than 400%.
Several factors that have had an impact on the market success of the manufactured home community include:
· Rising housing prices and a tight housing market. Millennials and Generation X find that they are being priced out of modern homes that have enough room to raise their families. The average home price in the United States has increased by 25% since 2012, and some cities have seen housing prices double. Even as housing prices climb, the number of available homes in many cities is small. The planning commissions of many cities have decided against building high-density, affordable places to live. With less supply, demand has increased, which further drives up the price of homes. Manufactured homes, however, have remained affordable due to low construction costs.
· Locations where people want to live. Most people want to live close to where they work, but whether you live near a city, in the suburbs, or in a more rural area, finding a house within 30 minutes of your work can be difficult. Manufactured home communities are positioned near areas that are within about 15 miles of higher-population areas that have plenty of jobs and healthcare options. That also means that residents are close to entertainment, shopping, and restaurants.
· Apartment rental prices are increasing. While housing prices shoot up and fewer homes are available, apartment management has responded by increasing rental prices. In fact, in the many areas, people are paying much more to rent than they would to own their own three-bedroom, two-bathroom manufactured home, let alone rent or lease one.
As the housing market continues to shift, investors who are interested in acquiring real estate assets are seeing the benefits of buying stock in manufactured housing, which includes long-term appreciation and recession resistant qualities, as evidenced in UMH’s new 52-week high.
UMH properties owns 100 manufactured home communities in seven states throughout the northeastern United States, and our expansion plans for the next four years are going to provide even more housing to people who are looking for spacious, affordable homes.