Thanks Saul.
A few other things that stood out to me (from memory):
They are being conservative on guidance and will have the opportunity to raise guidance again after Q3 results (yes they said this). I think they will probably raise guidance by another 25 cents and 200-300 homes in November.
They are being conservative for the following reasons:
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possible supply constraints in the event that they can’t build enough inventory,
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demand drivers look very favorable across the board now but I think part of their conservatism takes into account that the demand drivers could change by they end of the year. To me this doesn’t seem likely but it;s certainly possible.
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Who knows if winter will affect their construction schedules later this year. Most of their communities are in mind temperature zones but they have a few in areas that could be hit by heavy rain (Seattle, Portland) or snow (Minneapolis, Colorado).
My personal feeling from the conference call other factors is that LGIH might be able to sell 5600+ homes in 2017 but the real limitation is not having enough homes to meet all the demand. An open question for me is whether they can scale their operations between and the start of 2018 to meet demand the will likely be there in 2018. Growth may continue to be limited not by demand for their houses in their target markets but by their ability to execute on building enough supply. They ran into this issue in the start of 2017 and I wonder if they will run into similar constraints in 2018 (maybe not as bad as in early 2017 but enough to limit super strong growth).
Chris