A Few Certainties: Death, Taxes and Retiring in Florida

On Nobility Homes FQ407 earnings call, President Terry Trexler talks about what Nobility is doing in the face of almost 50% lower sales of modular homes this year. The modular and manufactured homebuilder sees hope in retirees for their products. Apparently, not everything is bad in Florida's real estate market.

Bill Richard - Scobell Company

...I know this is lot of cash on the balance sheet: what are your plans for that? Do you have any plans for making any acquisitions or share buyback or what? Is there anything on the agenda that you could tell us about?

Terry Trexler - Chairman and President

Well, yes. After year-end we invested in two new Florida retirement manufactured housing communities. And also we have contracted by one of our retail model centers that we are currently leasing. And Tom, plans to continue to make some purchases there on some of the leased properties that we are on, we're going to continue to look at other retirement communities, we just think that with the housing market the way it is and the way we think it's going to be for a while, but you know the retiree is going to be a strong market with the numbers of baby boomers retiring.

We just think that building a new affordable manufactured housing community in key areas in the state of Florida is going to be good for the next 10 years. So, our hope is to kind of put together a little portfolio, where we provide all the homes in those communities, and not only help top-line sales, but also develop another revenue stream for the company.

Later on in the call:

Terry Trexler

...We think that with the credit problems that are out there and the tightening of the credit on the site build in the condo market, that we are already seeing some people moved down in to manufactured homes. And, I think, you are going to see in the next 12 months, people looking for more affordable housings. Lot of people are retiring and moving down to Florida, will go ahead and, even though they haven't sold their existing home up north yet, because of the slow market, they will buy a second home and that's why we like the retirement business.

We think a lower priced, affordable, manufactured housing community is very attractive to these people, because they will buy it as a second home and not have to worry about selling their home up north right away. One other thing that we've heard in some of our conversations with the retirement sector is that, they have a limited number of years left and, if they have always dreamed for retiring in Florida, they don't want to wait until the housing market turns around completely. And I think that we will see that part of the market come back quicker than you will [see] condos and site-built in Florida.

Comments

[Carl leason:]

I believe the mobile home manufacturers are going to have a very hard time in Florida for many years to come.
As a long time Realtor, I find it very hard to sell mobile homes as the rental lots charge way higher monthly costs than condos, also, Insurance costs are not just high for a mobile,...as Insurance is simply not available for many, especially those that are close to the water. and mobile homes, regardless of what the manufacturers say,
are simply not built up to the standards of a site built home. I've seen "glued on" plasterboard, that comes off and you find it laying around in broken pieces on delivery, floors that literally "melt" if they get wet, constant keeping it level, which means getting under it and shimming up the supports underneath. Some are getting smarter and placing them on regular concrete perimeter foundations, etc. but the center supports still continue to slowly sink,...
I speak as a former owner of a mobile home park and I have seeen it all. Yes, some are built better than others, but another point is the electric bills, which are virtually always higher than site built homes, even though the Mobile home builders say their homes are so well insulated,..if one decides to go for a top of the line Manufactured home, with a side by side double garage, a porch or deck, then they are no less expensive than a regular site built home and maybe more expensive, then come the inevitable annual lot rent increases !!! To top it off, most mobile homes depreciate much like a car. The old ones are simply demolished and carried away in a dump truck ! The ground tie straps get rusty and simply fall off, you name it ,...when you have a mobile, you have problems and it ain't easy to just move it to a new location if you don't like the rules !
Cheaper, initially maybe yes, but in the long run, I'll stick to a site built home ! Even in a new Mobile/ manufacturered community, the pre-owned ones are a lot cheaper than the new ones, by a lot !!
If they catch on fire, it only takes minutes for it to simply be a pile of ashes ! As for me, I'll stick to living in a site buillt, concrete block built home on a slab of concrete ! LC

2007 Dec 26 08:32 PM