Absorption was very strong, averaging 6.8 closings per community per month. This was an increase over the 6.4 closings per month last year; all while increasing our average sales price by 6% and adding 11 communities outside of Texas.
Based on absorption, our top market for the quarter were Houston, Fort Myers, Dallas/Fort Worth and Charlotte. Our absorption pace in Houston was 10 closings per community and the others each had an average of approximately nine closings per community per month.
Texas continues to be our leading division, generating 585 closings, which was 52% of our total closings. We saw a 20% increase in closings in Texas compared to last year with the same number of active communities. 48% of our closings this quarter came from markets outside of Texas, up from 43% last year. Year-over-year, the Florida division increased closings 57%, the Southeast division increased 50% and the Southwest division increased 34%. This growth was driven by our new communities, which enabled us to increase closings while maintaining similar closings per communities for each of these divisions.
Our Northwest division is off to a solid start. The first closings occurred in May and we ended our first quarter in this division closing 11 homes with an average sales price above $275,000. Seattle is the most recent market that validates our business model, which is focused on being an affordable alternative to renting. These new markets are more expensive to get into an entry-level home, but they are also significantly more expensive for rents.
And SG&A expenses were down significantly as a percent of sales.
Sorry, I don’t see the pessimism.
Saul
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The market seems to agree (for now) as it was up 6.7% yesterday, and another 2.5% on top of that today, as I write.
Saul
Wouldn’t be in LGIH if not for you and your board. It’s my #1 preforming stock for 2016.
Thanks,
Steve
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“Sorry, I don’t see the pessimism.”
I agree Saul, and that is why I still have a 9% position. I did, however, sell some shares a while back. But that was to reduce the size of my position in LGIH and increase the size of another holding.
But I have moments of doubt sometimes on any stock holding…The important thing is to not ACT on emotional doubts or groundless fears.
I usually think it through first and do nothing. Especially when the whole market is going down. But even if I make a mistake I can always buy back in…or out.
In this case and IMO, I clearly should have kept my larger size holding of LGIH and let it get larger before trimming…But, of course, I never make mistakes :)…More upside is likely coming though, otherwise why own this stock at all.
Frank
In this case and IMO, I clearly should have kept my larger size holding of LGIH and let it get larger before trimming.
But Frank, I think it’s best to keep your positions at a size where you can sleep well at night. You can always say in retrospect “Oh I wish I had let that position grow to 40% of my portfolio”, but that’s quite scary and rash in real life. Just be happy you still have 9%. My position size is about double that, but it’s a size that I am comfortable with, for me, and that’s what counts. When it was getting quite a bit bigger, I sold some of mine too.
Best.
Saul
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Good point Saul but one of my other positons (Tesla) I have let grow up to 20% and have had no problem sleeping at night.
My Tesla holding is always 19% to 20% of my portfolio…I got into this stock during 2012…it’s up 114%. I have added on dips and trimmed when it gets over 20%. This company has a story that Is unlike any other stock I have ever owned…If things go as I expect them to (not without some volativity of course) I might at some point just let it grow to new higher than ever percentages of my portfolio… I have very high conviction on this one…It’s uh, revolutionary IMO.
Now, as you said, I should be happy having 9% position with LGIH, a company that has delivered such generous returns that each time I have trimmed it down I was also taking profits…Nothin wrong with that. In fact, I am happy
Best,
Frank
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