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Homebuilders reporting Q3 increases

Strong growth in western region

Posted: October 3, 2012 2:00 a.m.
Updated: October 3, 2012 2:00 a.m.

In this Wednesday, May 16, 2012, photo, construction workers work on a new house in the Crestview area in Santa Clarita, Calif. U.S. builders started work on more single-family homes in May and requested the most permits to build homes and apartments in three and a half years. The increase suggests the housing market is slowly recovering even...

As homebuilder confidence steadily grew this year, construction companies’ third quarter results echoed that outlook.

With new orders for 4,198 homes, Lennar Corp. reported orders were up 44 percent over the same period from a year ago. Deliveries of 3,655 new homes were up 28 percent for the builder. And Lennar’s net earnings of $87.1 million, or $0.40 per diluted share were up from $20.7 million and $0.11 per diluted share over third quarter 2011.

“The housing market has stabilized and the recovery is well underway,” said Stuart Miller, CEO of Lennar. “Our third quarter reflects solid profitability in all of our business segments. In home building, we continue to see strong sales trends translating into increased deliveries, stronger gross margins and improved operating leverage.”

KB Home delivered 1,720 new homes, up 7 percent from the third-quarter 2011, with three of the company’s four home building regions reporting year-over-year increases. Net income of $3.3 million marked a $12.9 million increase over a net loss of $9.6 million over the same period from a year ago.

The homebuilder did not report on the number of new home orders in its quarterly report, but did note that the average sales price rose 8 percent to $245,100 compared to a year ago. KB reported that average sales prices increased 14 percent in the company’s west coast region — the most of any of its other homebuilding regions.

It is clear that the recovery in housing is gaining momentum across the country, said Jeffrey Mezger, president and CEO of KB Home. Inventory levels are declining and home prices are on the rise. KB Home is seeing dramatic improvement in California, he said.

Homebuilder D.R. Horton reported net sales orders for the third quarter increased 25 percent to 6,079 homes from 4,874 homes in the same quarter a year ago. For homes that closed sales in the quarter increased 9 percent to 4,957, up 402 homes over the same period a year ago. Net income for the homebuilder’s third quarter increased to $787.8 million, or $2.22 per diluted share. Earlier this year, The Signal reported D.R. Horton purchased home sites in the Santa Clarita Valley from Newhall Land.

D.R. Horton’s homebuilding and financial services operations delivered another quarter of strong results, said Donald R. Horton, chairman of the board. All homebuilding regions were profitable in the third quarter and each region reported increases in sales, he said.

While Pardee Homes, a homebuilder in the Weyerhaeuser Company’s division of homebuilders, did not report numbers for its segment of business alone, the timber company reported that home sale closings of 508 single-family homes increased. The backlog of homes, in what is its second quarter period, was 1,033 units, a 53 percent increase compared with one year ago.

“We are seeing signs of a rebound in the U.S. housing market, and as markets strengthen, the operational improvements within our Wood Products business are yielding clear results,” said Dan Fulton, president and CEO.

And, while privately held, local homebuilder Lance Williams, of Williams Homes, told the Signal in June that the homebuilding business is the best it has been in six years.

“We haven’t seen this in six years,” Williams said. “It’s a big deal and it’s great — we’re very excited about it.”


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