STATE HUNGER FOR PREFAB HOMES GROWS.

Byline: Kevin Smith Staff Writer

California ranked sixth in shipments of manufactured homes through June and was one of only three states to show an increase compared with a year ago, an industry report reveals.

In the first half of this year, California manufacturers shipped 3,685 mobile homes, up a modest 0.8 percent from the 3,656 shipped a year earlier, the Manufactured Housing Institute reported.

``I was kind of surprised to see that it was up at all,'' said Michael Corelli, a manufactured housing analyst with Du Pasquier & Co. in White Plains, N.Y. ``Almost none of the states showed an increase ... that's a rarity.''

Alaska and Rhode Island showed far bigger increases but that was because their numbers were so low to begin with that any uptick would seem dramatic.

Alaska's shipments jumped 93.3 percent to 29 homes shipped this year compared with 15 a year earlier. Rhode Island likewise jumped 60.5 percent to 61 units shipped during the first half of 2001, up from 38 during the same period last year.

California has held its own in the industry largerly because it didn't overexpand its retail network for selling manufactured homes - a phenomenon that occurred nearly everywhere else, according to Bob West, president of the Rancho Cucamonga-based California Manufactured Housing Institute.

``If you go back to the early 1990s, you could have taken these same tables and turned them around,'' he said. ``Back then all of the other states were going crazy with (production and shipments) and we were declining because there was a major economic drop going on in California.''

Now, shipments in California are up, despite severe drops elsewhere in the nation, such as Texas, North Carolina, Georgia and Oregon, West said.

``A lot of the companies that got into the retail end of the business weren't really prepared to do so,'' he said. ``The supply of homes was outreaching the demand.''

Lenders were also far too lax in their requirements, which ultimately resulted in a wave of repossessions that flooded the market with used factory-made homes that could be purchased for much less than new ones, West said.

California ranked ninth in production of factory-made homes, producing 3,683 units through June of this year, a 9.6 percent decline from the 4,076 built during the first half of last year, figures show.

On a nationwide level, the industry has continued to suffer. Nationwide shipments of mobile homes plummeted 34.7 percent during the first half of the year to 92,828 compared with 142,202 a year earlier. Production likewise dropped 34.9 percent.

But Corelli sees brighter days ahead. ``There's been a big cleansing of overcapacity and credit standards have been tightened up,'' he said. ``I think we're now a much healthier industry going forward.''