Manufactured homes

[powayseller]

anxvariety, you are definitely on to something. Population is growing, and where are all these people moving? Are they squeezing 3 people/bedroom, to save money? Going to cheaper cities? The trend is for more elderly to fall into poverty levels, so they would buy a trailer in a Yuma trailer park, not a $800K home in FL. Just my thoughts, I could be wrong. I haven’t researched demographics yet.

My landlord is savvy with these things. After Hurricane Katrina, be hought rental property in Baton Rouge. He is cash flow positive, and the rental demand has pushed up rents and home prices. This move had not occured to me.

[anxvariety]

The trend is for more elderly to fall into poverty levels, so they would buy a trailer in a Yuma trailer park, not a $800K home in FL.

If solving poverty is a high priority issue, I’d love to help solve it! I would help them find something as described above for 150-200k.. that’s a pretty simple solution.

Plus, maybe others can correct me if I’m wrong.. but aren’t dry climates better for the elderly? Aren’t there less allergenics and germs? This is just a guess, maybe it’s the opposite.. Even if true I guess one could argue that heat is bad for elderly.. but I feel that overall desert living is pretty underrated.

My landlord is savvy with these things. After Hurricane Katrina, be hought rental property in Baton Rouge. He is cash flow positive, and the rental demand has pushed up rents and home prices. This move had not occured to me.

PS, FEMA bought a bunch of manufactured homes from CAV and others just after Katrina.. I thought that was interesting and sort of related to what you’re talking about.

The FEMA contracts accounted for 419 shipments during the quarter, or about $13 million in revenue, he said.

During 2005, Cavalier contracted to build a total of 2,638 homes for FEMA with a value, including shipping, of approximately $81 million. Cavalier said FEMA’s unique specifications translated into higher selling prices. Throughout 2005, Cavalier delivered 2,219 FEMA homes for revenue of $68 million.

“Aside from FEMA business, revenue for the first quarter still advanced from the year-earlier quarter even as non-FEMA home shipments declines slightly,” Roberson said. “We are pleased that Cavalier remained in the black for the first quarter of 2006, which is traditionally a seasonally slow period for our company and the industry, and one that in recent years has produced a net loss for the company.”
http://birmingham.bizjournals.com/birmingham/stories/2006/05/01/daily17.html

[Bugs]

I think the exodus of retiring boomers from the metro areas may prove to be a boon for middle America. Some of these agricultural towns that have been dying off because of lack of employment can reorient into retirement-friendly communities. Good for their business communities and tax base and appropriate for someone looking for a slower pace of life. There are still lots of towns in the U.S. where a retiree can buy a property for less than $100k and get away from the urban/suburban lifestyle.

[anxvariety]

Yes, and some of those places are in California! Check out Adelanto.. inland empire inexpensive real estate(although it did boom recently) where you can live semi-remotely yet still have a commute-able distance to LA.

[powayseller]

A quick scan of AARP showed that the West has the highest rates of elderly. One study found that most boomer plan to retire in place. They want to continue living in their homes, work part-time, keep their health plan and doctor, expect their kids to move in, care for their grandkids, and avoid the shuffle of a move.

In my extended family, I have seen the choices made depend on income. A retirement community choice is an upscale Del Webb community or a trailer park. Other choices are maintaining one’s home, moving in with one of the kids, or a combination of retirement living in a Southern state during the winter and returning home for the summer.

The elderly definitely prefer the hot climate. It is good for their bones, as well as their lungs. The ones who can afford it, stay in the South only in the cooler months, and go to their previous home in the hot summer.

I think Yuma is growing rapidly for this reason. It is pretty cheap.

I think this is worth researching. Money will follow the boomers.

The problem in the survey is that most boomers said they would remain in their homes. But how many have their homes paid off? Many took on additional loans…Many boomers thought they could sell their homes to fund their retirement. Talk about dashed dreams!

[anxvariety]

On my way out so making this quick.. but I have a friend that works at a company that specalizes in loans to elderly.. it allows them to cash out equity and the balance isn’t due untilt he person dies.. probably a rip off, but I thought it was interesting that people would do that.

PS, that sounds about right as far as what a retired person might want.. but I think cost is going to be a big factor and might cause them to find some happy mediums on the proximity to family and desire to work part time factors… like maybe they’d move a little more remote where they would probalby make the same part-time, but have smaller expenses.. sure it’s just a guess without running any real numbers or surveys.

[carlislematthew]

The problem in the survey is that most boomers said they would remain in their homes. But how many have their homes paid off? Many took on additional loans…Many boomers thought they could sell their homes to fund their retirement.

You’ve hit the nail on the head. I don’t think you can entirely listen to what people *say* they’re going to do – they often have no clue. I often here that:

a) Boomers are using their home as a retirement piggy bank.
b) Boomers want to retire in-place.

If you want the equity, you must downsize or leave to somewhere cheaper.

[davelj]

A company’s only got a low P/E until the “E” goes away. The reason many cyclical companies trade at seemingly low P/Es – like the builders right now – is because their “E”s are about to go in the toilet, thus ultimately raising their P/Es to more “normal” levels. Virtually all housing stocks are going to suffer going forward – manufactured and otherwise. All housing and related stocks are a sucker’s bet right now – this housing correction is going to play out over several years.

[anxvariety]

davelj, what I’m trying to say I think that manufactured housing companies will grow as traditional housing market deflates. I’d provide some reasons, but I already have.

[FormerOwner]

I’ve noticed that a lot of retired folks are moving out to remote areas to retire; they get a nicer house on a larger lot at a lower price than they would in an area with more jobs and city culture.

The only problem is that in these far out areas the ONLY way to get around is by DRIVING. Has anyone noticed that older folks are not the best drivers? Maybe they can pull it off when they’re in their 60’s and 70’s but what happens after that? Are they all going to die in car wrecks driving to doctor’s appointments or to visit their families? How does this make sense? Shouldn’t older folks live in communities with public transportation so than can be independent but not be a danger to themselves and others behind the wheel of a car? What are the nation’s rural roads going to be like in 10-20 years? Better make sure you are driving a safe car eh?

[anxvariety]

Has anyone noticed that older folks are not the best drivers? Maybe they can pull it off when they’re in their 60’s and 70’s but what happens after that? Are they all going to die in car wrecks driving to doctor’s appointments or to visit their families?

Hey I have an idea.. how about their families visit them????? There are mobile doctors also…

Suprisingly a few desert areas have a very strong medical presense due to the somewhat rare but usually severe off road activity accidents.

Poor air quality and sickness are two things I’d like to limit my exposure to when I’m older..

[Bugs]

A lot of people associate mobile/modular homes with being substandard, and there is some of that. But increasingly there’s also some of this factory built housing that’s actually superior in quality to what you’d find at a lot of our local subdivisions. Better materials, better fit, more uniform craftsmanship.

I’ve been in a few of these homes and the only difference you’d notice is that they are usually built with a raised foundation rather than a slab. We’re talking about 2×6 framing, 10ft interior ceilings, solid core doors and everything else that’s important. If anything, they’re more structurally sound than most of the 2×4 tract construction we get around here. They’re built in a controlled environment by a full time crew, using stock plans with several variations and finishes and they get several QC inspections and an enforecable warranty. You wouldn’t mistake them for a luxury home but then again most of the so-called “luxury homes” here are but dressed up tract homes. Not everyone needs a 4,500 SqFt big box.

I read one article a while back that factory built housing now comprises something like 30% of the market on a nationwide basis.

If we were really all about affordable housing, we’d be building a lot more projects featuring these units in the outlying areas.

[speedingpullet]

I don’t know if I’ve mentioned this here before, but I saw a really interesting news story on Real Orange a few days ago.

Apparently, as a result of our trade with China, there is a huge surplus of sea containers. More arrive than get sent back, so they’re piling up in places like the Port of LA, and people in houses next door to the shipping yards are starting to complain that thier daylight is being compromised by the huge piles of these things.

So, some enterprising people are starting to buy them for pre-fab housing units!

Not so stupid, it seems. These containers are 9′ high, are already insulated, have air conditioning units (cold storage), are virtually bug-proof and normally have a hardwood floor in them. Its simple to cut out sections to make dooways and windows, and they can be attached to each other to make larger units.

They look pretty cool – here’s a link to an article (not the Real Orange one):

http://www.makezine.com/blog/archive/2006/08/used_shipping_containers_as_ho.html

[powayseller]

Bugs, could you elaborate on the poor construction of 2×4 tract homes. The house we built was 2×6 construction, and we watched it go up and knew it was well built. But without seeing your home built, how can you tell the quality? Are these low quality homes limited to low income areas, or do they exist also in the expensive areas? What are the ramifications of buying such a house?

[SD Realtor]

PS I have read the same thing that bugs elaborated on. The deal with alot of the modular homes that are factory built is that everything is built in then factory then shipped and built. So walls are all built with insulation, conduit, even plumbed. Since they are on an assembly line they are all built to a standard process that has a higher level of QA then a home built on site by construction workers. I am not saying that the construction workers to a bad job. I am saying though that assembly line construction in general has lower tolerances for error. All the walls come out the exact same size, etc… So if the slab is even then the modular house will be built in a fraction of time, generally two weeks, and yes it very often fits together better so to speak.

Also I saw the special on the architect who was designing homes out of shipping containers. Very interesting stuff.

Last but not least, lending criterion has been much more strict on manufactured homes so I believe that you will not see many foreclosures at all on manufactured housing.

My only qualm about manufactured housing as an investment is that I think it is a better investment in a ROBUST housing market so you can tap into the buyers who cannot afford the market. Now that the market is declining I feel that the entire market psychology will even extend to even touch this market as well.

Just my guess.

[Author]

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