Wednesday, January 30, 2013

Lawler: Some Home Builder Results

by Bill McBride on 1/30/2013 04:32:00 PM

From economist Tom Lawler:

D. R. Horton, the nation’s largest home builder, reported that net home orders in the quarter ended December 31, 2012 totaled 5,259, up 38.6% from the comparable quarter of 2012. The company’s sales cancellation rate, expressed as a % of gross orders, was 22%, down from 26% a year ago. Home deliveries last quarter totaled 5,182, up 25.8% from the comparable quarter of 2012, at an average sales price of $236,067, up 9.9% from a year ago. The company’s order backlog at the end of 2012 totaled 7,317, up 61.5% from a year ago, with an average order price of $240,358, up 11.7% from a year earlier.

Here is an excerpt from the company’s press release.

Donald R. Horton, Chairman of the Board, said, “This quarter was our most profitable first quarter since 2007, with $107.9 million of pre-tax income, a 270% increase from the year-ago quarter. We experienced substantial increases in the number of homes sold, closed and in backlog compared to the year-ago quarter. At the same time, our average sales price has increased due to pricing power, geographic mix and larger average home size. As a result, we achieved dollar value increases in homes sold of 60%, homes closed of 38% and backlog of 80%.

“We experienced broad improvement in demand in most of our markets this quarter, and we significantly increased our investments in homes under construction, finished lots, land and land development to capture this increasing demand. D.R. Horton is the best positioned it has been in its 35 year history. We are looking forward to the spring selling season with optimism.”
The Ryland Group, the 8th largest US home builder in 2011, reported that net home orders in the quarter ended December 31, 2012 (including discontinued operations) totaled 1,502, up 64.2% from the comparable quarter of 2011. The company’s sales cancellation rate, expressed as a % of gross orders, was 17.9%, down from 21.4% a year ago. Home closings last quarter totaled 1,578, up 51.7% from the comparable quarter of 2011, at an average sales price of $270,000, up 6.2% from a year ago. Ryland said that “sales incentives and price concessions” totaled 8.7% last quarter, compared to 10.7% during the same period in 2011. The company’s order backlog at the end of December totaled 2,398, up 58.4% from a year earlier, at an average order price of $278,000, up 8.2% from a year ago.

Here is a summary of builder results reported so far.

Net OrdersSettlementsAverage Closing Price
Qtr. Ended:Dec 2012Dec 2011% ChgDec 2012Dec 2011% ChgDec 2012Dec 2011% Chg
D.R. Horton5,2573,79438.6%5,1824,11825.8%$236,067 $214,740 9.9%
NVR2,6252,15821.6%2,7882,39116.6%$331,900 $304,600 9.0%
The Ryland Group1,50291564.2%1,5781,04051.7%$270,000 $254,000 6.3%
Total9,3846,86736.7%9,5487,54926.5%$269,658 $248,610 8.5%

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