FEMA is Auctioning Off Thousands of Trailers
Posted:29 June, 2009 by Trailer Park Superstar
Manufactured home dealers are worried, as FEMA is auctioning off thousands of trailers remaining from Hurricanes Katrina and Rita.
The dealers’ concerns are that their customers will choose to purchase the FEMA trailers at “fire-sale prices,” which could cause harm to the manufactured home market and pricing structure.
“People think they’re just going to get to buy them for nothing,” said Gale Crews, owner of Diamond State Mobile Home Sales in Hope, Arkansas. About 20,000 FEMA trailers are being stored at the city’s airport.
The trailers are expected to sell for less than half of the cost of a new manufacture home, perhaps as low as $25,000 to $40,000.
The trailers will be auctioned through a government Web site. There were 47 trailers for sale on Wednesday evening. Bids have ranged from $5,191 for a 2006 Coachmen Spirit of America trailer with possible water damage and a missing stove grate, battery and other items, to $12,600 for a 2006 Sunnybrook RV Sunset Creek trailer with “no obvious exterior damage.”
The Federal Emergency Management Agency (FEMA) purchased 145,000 trailers in a panic just before and after Katrina’s devastation. The government agency spent approximately $2.7 billion, most of which went to these no-bid contracts.
It is estimated that the sell of these vacant homes (the total number stored across the U.S. reaching as many as 60,000), has only netted about 40 cents on every taxpayer’s dollar.
Legislation was passed by Congress in October, which has kept FEMA from selling these unused trailers directly to the public. The legislation came from strong urging of the manufactured home industry. So, FEMA must first attempt to donate the homes to federal, state and local agencies and public service groups.
Yet, even after such attempts, the number of homes that the agency will eventually be able to sell has manufactured home distributors extremely concerned. The potential of sells through FEMA will equal approximately 30 percent of the recreational vehicle industry’s U.S. sales in 2006.
“As you can imagine, a public auction of so many vehicles could devastate the market for travel trailers,” Michael Molino, president of the 2,700-member Recreational Vehicle Dealers Association, state in a letter sent Friday to FEMA Director R. David Paulison.
The General Services Administration is working in conjunction with FEMA, selling the auction trailers in groups of 300, hoping to alleviate the feared impact on the manufactured home market.
More than 64,000 FEMA trailers are still being used by Hurricane Katrina victims.
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