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Friday, March 23, 2012

KB Home: Deliveries Up, Net Orders down year-over-year

by Calculated Risk on 3/23/2012 08:46:00 AM

While we wait for the new home sales report, from KB Home via MarketWatch: KB Home Reports First Quarter 2012 Results. A few excerpts:

Homes delivered increased 21% to 1,150, up from 949 homes delivered in the year-earlier quarter ... The average selling price rose 6% to $219,000 from $205,700 for the year-earlier quarter ...

Net orders totaled 1,197 in the first quarter of 2012, down 8% from 1,302 net orders in the year-earlier quarter ... gross orders were up 3%, an increase in the cancellation rate to 36% from 29% in the year-earlier quarter led to the year-over-year decrease in net orders.

The Company had a backlog of 2,203 homes, representing potential future housing revenues of $460.0 million, as of February 29, 2012, compared to a backlog of 1,689 homes, representing potential future housing revenues of $353.6 million, as of February 28, 2011.
“Reflecting the improving trends in the economy, including recent job growth and higher consumer confidence, we are seeing signs that the overall housing market is stabilizing and beginning to recover,” said Jeffrey Mezger, president and chief executive officer. “The pace of the recovery is uneven, however, with certain local markets showing greater strength and more normalized activity than other areas where a rebound will take longer to manifest. We expect that the housing market in general will gradually strengthen as the economy continues to advance.”
Gross orders were only up 3% year-over-year (not much of an increase), and net orders were down due to an increase in cancellations. Hopefully they will address the increase in cancellations on the conference call - and which local markets are "showing greater strength".