Frequently Asked Mobile Home Question: Value

How does the county assessor determine the value of my manufactured home?

Manufactured homes are subject to Proposition 13 under which the county assessor determines the base year value of a manufactured home, which is generally the market value at the time of purchase. After the first assessment annual increases to the base year value are limited to the inflation rate, as measured by the California Consumer Price Index, or 2 percent, whichever is less. Any new construction will have its own separate base year value. When the manufactured home is sold, it will be reassessed at its current fair market value and a new base year value will be established. If your manufactured home is located on land that you own, the land will be assessed separately. If you live in a tenant-owned mobilehome park, a different rule may apply.

The basic structure is assessable as well as all accessories, including, but not limited to: awnings, fences, windbreakers, storage cabinets, heaters, carport, water coolers, cabanas, porches, and skirting.

Section 5803(b) of the Revenue and Taxation Code specifically provides that the assessed value of a manufactured home on leased or rental land is not to include any value attributable to the land where the home is located. This means that the county assessor must not increase the value of your mobile home because of positive location nor decrease the value because of negative location.

Mobile Home Values and Sales Prices

At least two firms publish information on mobile home values – Kelly Blue Book and the NADA Guide. Like other personal property (cars, airplanes, boats, etc.) the value of a mobile home depreciates as it ages. Values are provided in these evaluation guides for mobile homes/manufactured homes located on a sales lot as well as those located in a rental mobile home community. Obviously, the value of a manufactured home located on free land is driven by the value of the land rather than the structure sitting on the land.

Regarding mobile homes in rental communities, there is an added “value” attributed to a manufactured home being sold “in place” in a mobile home community. Although the value of the land is not part of the value or sales price of a mobile home, there is a value attributed to the fact the home is located in a park and the assumption that a buyer will pay a premium for the ability to purchase the home and have it remain in the park. In other words, there is value attributed to the “leasehold” interest assumed by the buyer of a mobile home in a rental community. It is not uncommon for purchasers of mobile homes to pay many thousands of dollars for an old mobile home that literally has no value simply because of the location of the home in a desirable community.

The factors considered in valuing a mobile home located in a community include the location of the park, the amenities and general appearance/condition of the community. The values assigned by the appraisal guides to mobile homes located in mobile home parks do not take into consideration the market conditions of a region or the costs associated with living in a particular location or park.

All of these factors and others come into consideration when a mobile home is sold “in place” in a mobile home park. As an example, the same make and model 40 year doublewide mobile home located in a mobile home park on the ocean will sell for more than the same home located in a park located inland. In the case of the ocean front mobile home, the purchaser is not paying for the “value” of the mobile home, but rather is paying a premium to the seller because of the location of the mobile home.

In addition to the location of the community park, the cost to live in a park or region is also a factor in the sales prices of mobile homes. The amount a willing buyer and willing seller agree upon depends on the purchasing power of the prospective homebuyer. In other words, the monthly housing budget they have to spend. By of an example – a typical mobile home buyer may have a monthly housing budget of $1,200. This housing budget must cover the rent, mortgage, and utilities. They are looking at the same make and model of mobile home in two different parks in central Orange County with similar amenities. One community charges $500 a month rent and the other charges $1,000. There is more than likely a difference in the sales price of the home as well as the rent. The home in the park with the lower rent is selling for thousands of dollars more than the one in the park with the higher rent. The buyer has a choice to pay more of their budget for rent or more for the mortgage.

Some mobile home owners who chose to pay less for the home and more for the rent are upset years later when they say they can’t sell their home for as much as the owner of the same home in another park with lower rent. Nothing has changed, the payment is made up-front in higher cost of purchasing the home, or paid incrementally over a long period of time in rent.
Additionally, it is not uncommon for the buyers of older mobile homes to pay cash for the home, making the lower priced home more attractive knowing that the only housing payment will be the monthly site rent.