Here are few of the highlights from Lennar's Q2/2012 conference call:
1. Lennar feels the housing market is bottoming or has bottomed. However, the recovery in the market is spottyand very regional. Lennar expects the national housing numbers to be mixed throughout the rest of the year.
2. Lennar tends to be ahead of its competitors in calling turns in the housing market.
3. Lennar saw an increase in closings and new orders in Q2. Over the prior 4 quarters, the average sale per community was 2.4 per month, but in Q2, the averages sales was 3.5 per month. This is evidence of demand increasing. Additionally, Lennar has been able to lower the amount of incentives by 140 basis points from the same time last year.
4. Lennar believes its flexibility and nimbleness gives it a competitive advantage. Most of its new land deals come from existing relationships, not from the competitive bidding process.
6. Lennar's acquisition of Rialto is helping it find deals and adding value to the homebuilding business, although Rialto itself is falling short of expectations due to borrowers being obstinate on resolving outstanding loans and looking for legislative solutions to lower the principal on their loan. So far, these attempts have been unsuccessful, but the need to use the judicial process is adding costs and delaying payments.
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