by Bill McBride on 10/01/2012 02:54:00 PM
Monday, October 01, 2012
From economist Tom Lawler:
Below is a table showing reported net home orders for the quarter ended August 31st, 2012 from the third, fifth, and seventh largest US home builders in 2012. Hovnanian Enterprises, of course, reported operating results for the quarter ended July 31st, 2012, but in its quarterly presentation it included net order results for August, 2012 as well.
|Net Home Orders, Quarter Ended:|
|Total of above||7,517||5,932|
For the quarter ended June 30th, 2012, nine publicly traded home builders reported combined net home orders of 20,375, up 27.3% from the comparable quarter of 2011.
Here are some excerpts from Lennar’s press release.
“Stuart Miller, Chief Executive Officer of Lennar Corporation, said, "The housing market has stabilized and the recovery is well underway."And here are some excerpts from KB Home’s press release.
“While materials and labor costs are moving higher, sales price increases and incentive reductions should continue to offset the impact of increasing costs. “The average sales price of homes delivered increased to $258,000 in the third quarter of 2012 from $247,000 in the same period last year. Sales incentives offered to homebuyers were $26,100 per home delivered in the third quarter of 2012, or 9.2% as a percentage of home sales revenue, compared to $33,600 per home delivered in the same period last year, or 12.0% as a percentage of home sales revenue, and $29,800 per home delivered in the second quarter of 2012, or 10.7% as a percentage of home sales revenue.”
"We are pleased to report a profit for the third quarter," said Jeffrey Mezger, president and chief executive officer. "During the quarter, we continued to generate improvement in several key financial and operating metrics. The favorable year-over-year performance in our deliveries; revenues; operating income; net orders; and backlog were particularly encouraging as we operated with fewer communities. These trends illustrate that the strategic repositioning of our operations to restore profitability is starting to yield tangible results, as we also saw significant increases in our overall average selling price and gross profit margin, and substantial improvement in our selling, general and administrative expense ratio. At the same time, it is clear that the recovery in housing is gaining momentum across the country as inventory levels are declining and home prices are on the rise. In particular, we are seeing dramatic improvement in California, where we are the state's largest homebuilder, as the continued strengthening in the coastal markets is now spreading inland to Sacramento, the Central Valley and the Inland Empire."Finally, here is an excerpt from Hovnanian’s press release (from early last month).
“Unlike the past few years, the market for new homes has been resilient through both the spring selling season and throughout the summer months this year. We believe the housing market's recent overall strength and our significantly improved sales pace this year indicates that the market for new homes has bounced off the bottom and is already in a period of gradual recovery.”The “verbiage” from publicly-traded home builders was in general significant more upbeat in their latest quarterly releases than was the case last year and earlier this year. Moreover, several builders have recently raised capital for “general corporate purposes,” mainly because of the improved outlook. This suggests to me that the pace of SF home building is likely to pick up both during the remainder of this and into 2013.