If you are buying in a market where prices and rents just barely or don't keep up with inflation (which is true in much of the so called "cash flow" markets that many seek out), then I agree, there is not real money in long term buy and hold for the very reasons you mention.

That's a matter of inflation - deflation can occur but obviously 1980 lower.

If someone was looking for an alternative investment providing a reasonable rate of return which was safe and kept pace with inflation, real estate was the only game in town.

Worse case at the rate of inflation and best case at the rate of overall housing values.The biggest challenge with manufactured homes is financing.  

Lenders require disputes to be removed and your score will drop (further than it was previously) because you artificially inflated your score temporarily.

Had been thinking Worcester MA but a friend thinks everything is inflated there.

On the supply side, both Phoenix and I'm guessing the markets you are looking at in Ohio have vacant lots and ample opportunities for developers to adjust supply up or down over the longterm to meet demand, which will tend to put a CAP on long term appreciation and rents, though they may fluctuate in the short term with over and under building causing short term mismatches in supply and demand.Low demand and ample supply (many parts of Ohio) = prices and rents don't keep up with inflation over the long term.

SFH are much easier to liquidate, move in line with inflation, and rent better in Omaha.

Can I expect there to be any inflation (not that I am relying on that)?

Inflation is typically 2% right?