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Thursday, May 30, 2024

Prices and Home Values Increasing Along with Wage Increases

The cost of living, often referred to as the CPI, or Consumer Price index, has been increasing across the county as well as Southern California.  Everything is going up — from the cost of purchasing a mobile home, renting an apartment, purchasing a gallon of gas or a dozen eggs.  While this is discouraging, there is a counter balance to the increase in the cost of living and that is the increase in wages and social security benefits.  Social Security increased in 2023 by over 8% and minimum wage has increased from $11 an hour five years ago to $15.50 an hour.

The increase in wages, directly impacts the increase in all other goods and services.  Fast food is no longer affordable food.  The price of two breakfast sandwiches and two large coffees at McDonalds is over $16!   Cooking at home and packing lunches is far more economical and a good way to save.

The increase in wages and services dramatically impact the operations of mobile home parks and manufactured home communities.  Parks are small cities.  The Park ownership owns and maintains/replaces the streets, lighting, utilities, insurance, management costs, facilities (pool, clubhouse, work out rooms, and much more) within the communities.  Typically, the increase in these expenses each year exceeds the increase in the CPI.  This is the primary reason space/lot rents increase annually in order to cover the increase in the costs to operate the community.

The price of mobile homes has also increased rather than decreased over the past several years as well.  This is due to the dramatic increase in the cost of housing in general.  It is hard to believe that a nearly 60-year-old single wide, one bedroom, one bath home is listed to sell for nearly $70,000 in an Orange county mobile home park.  That is about four times what the home probably sold for new! 

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