With the benefit of 40 years of experience, comes an understanding of the housing sector and its cycles. In the US market, there are a certain percentage of households that can afford conventional homeownership. Historically this has been approximately 60-65%. Those that cannot afford a conventional home are limited to the choice of renting an apartment or owning a manufactured home. Fueled by low interest rates and loose underwriting standards, homeownership soared to a record high of 70%. As the housing bubble continues its correction, we see that this rate of homeownership was, as we predicted, not sustainable.

The manufactured housing sector was clearly hurt during the conventional housing boom. Total manufactured home shipments fell to all time lows of under 7% of new housing starts from a historical average of 15%. Now that the conventional home lending environment has returned to more disciplined lending practices, we believe that the manufactured housing sector is poised for a substantial correction. As new borrowers consider their housing options, manufactured housing will once again be viewed as an attractive and affordable housing alternative.

It continues to be our goal to deliver to our shareholders a total return investment, secured by a safe and growing dividend, coupled with appreciation in the value of our underlying assets. We have achieved this goal over the past forty years and I remain confident of our prospects to continue to do so in the years ahead.