The boom and bust RV cycles of Elkhart

The latest rankings in the Emerging Housing Markets Index has Elkhart, Indiana at the top of the list:

Photo by Kampus Production on Pexels.com

Small U.S. cities dominated The Wall Street Journal/Realtor.com Emerging Housing Markets Index in the third quarter, as high housing costs and remote-work opportunities drive many home buyers to seek out more living and outdoor space…

Elkhart, Ind., which bills itself as the RV capital of the world because its region is the country’s leading manufacturer of recreational vehicles, topped the housing index this quarter, followed by Rapid City, S.D., Topeka, Kan., Raleigh, N.C., and Jefferson City, Mo…

The recreational-vehicle industry is a major player in Elkhart’s economy. The Covid-19 pandemic spurred more RV demand, as households wanted to travel while keeping their distance from others. Wholesale RV shipments in the first eight months of 2021 rose 53.8% from the same period in 2020, according to the RV Industry Association…

The median home-sale price in Elkhart County rose 12.3% in August from a year earlier to $209,900, according to the Indiana Association of Realtors. There were 163 homes for sale that month, down from 220 a year earlier.

I am glad that Elkhart appears to be doing well at the moment. Having lived nearby for five years, the area has a lot to offer and economic development would be welcomed.

At the same time, it was not so long ago that Elkhart faced a difficult time. When the economy is not doing so well, such as in the late 2000s with a burst housing bubble, fewer people had money for RVs. Demand shrunk. Jobs disappeared. Before that, this area and South Bend were home to numerous manufacturers who went out of business or left. The homes have been cheaper here for a long time because few people want to move in.

It is good that this community in the Rust Belt at least has the opportunity to at times benefit from upticks in RV sales. Such industries and jobs could leave completely. But, having so many fates tied to one industry that can go up and down is trying in the long run. Numerous communities in the United States have looked to diversify their economic base – see the recent rush to add tech companies to their portfolios – even as they might have local economies based around a few companies or a few sectors. RVs may sell well one day and then conditions change and demand drops or new technology moves in. May Elkhart take some of this positive momentum and add to lineup of industries and services.

Own a houseboat or RV rather than a McMansion

Instead of building a waterfront McMansion with a boat slip, buy a boat or a RV instead:

But once in the channel, you see a new vista: On the north side there are at least a half-dozen, arrow-straight canals lined with houses. Most of the houses are large, but few are McMansions. Most have docks for their boat, or boats. And most are worth at least $1 million, not counting their nautical toys. If you’ve got the money, owning one of these places would be the start of a great retirement…

So let’s ask a question: Is there a reasonable substitute? Is there a way we can have the same kind of experiences of water, nature and easy living without the very large financial footprint of an expensive house with its monthly operating costs and taxes?…

Take the boat I chartered. At 33 feet, a couple could live on the San Souci. The cost: Maybe $25,000 for the used boat and about $600 a month for the rental slip. A larger powerboat would have more room and wider appeal. The slip for a 36-foot Grand Banks trawler is about $700 a month. You can buy them used for under $100,000. Keep the diesel engine in good shape and you can relocate at will…

Is living on a boat too eccentric for you? Not to worry. Walk up the street and try an RV. The Seabreeze RV and Mobile Home Park is less than a half-mile from Treasure Harbor Marina. Its 7.5 acres are right on the ocean — something you can’t get in a canal home that costs a mere million. Some of the RVs and park models are on the water. (Park models are RVs built to travel just once. They look like beach cabins.) And you can dock your fishing boat on site.

The RV or boat certainly offers less space and lower financial commitment compared to a McMansion. At the same time, McMansions tend to offer some land, a lot more space, and usually a facade intended to impress visitors.

Perhaps one of the biggest issues here is less about the size or financial commitment but about mobility. McMansions can’t really be moved, regardless of their price. In contrast, RVs, boats, and many tiny houses can be moved rather quickly. Mobility allows the owner to move to chase jobs. Mobility allows for a change of scenery – perhaps someone doesn’t want to live along the water forever. Of course, all three options require somewhere to park the habitat and this can cost a decent sum of money. But, if you don’t like the deal or financial circumstances change, the move is relatively easy compared to selling and buying a house.