They closed 367 homes in March, vs 298 in March 2015. That’s up 23.2%.
They were up 25.8% for the quarter…from 671 to 844.
Seems like pretty good numbers for a stock with a P/E below 10. (Soon to be even lower, I’ll wager, when Q1 earnings come in…unless the stock pops the way it ought to!)
Also, remember that the March 2015 over March 2016 quarter increase is for home sales closed. The prices should also be higher in March 2016 than March 2015.
Here are the recent average home sales prices (in thousands):
**Q end # sold avg price**
9/30/12 320 $134.20
12/31/12 320 $138.11
3/31/13 253 $141.28
6/30/13 411 $146.53
9/30/13 448 $151.78
12/31/13 505 $152.47
3/31/14 485 $156.54
6/30/14 662 $160.74
9/30/14 557 $166.10
12/31/14 652 $166.29
3/31/15 671 $179.87
6/30/15 853 $186.20
9/30/15 934 $186.25
12/31/15 946 $186.86
3/31/16 844 ???
Last March we had a big jump in average sales prices and average prices have been flat for the past 3 quarters. But we must remember that these are averages and the average can be affected by many factors that say little about actual rising prices; such factors might include: the mix of homes sold (e.g. number of 3 bedroom versus 4 bedroom), the mix of location and relative prices in each of those locations, etc. While rising average price is probably a good thing, understanding the reasons behind the rise requires looking at the details of the sales rather than the average.
As well as other significant factors, such as material costs and labor. Even more so in residential (over commercial, industrial or agricultural).
Many materials in residential construction are tied to commodity prices, such as lumber, copper, petroleum products - think vinyl fencing, vinyl windows, asphalt shingles to name a few - and it doesn’t take a whole lot of change in demand to alter the costs of these materials.
When the market starts to get hot, and I am in no way saying it is or isn’t, subcontractors see. They raise their prices. They look at what the cost of the home is selling for, vs. what they are charging. They talk to suppliers and others. Building permits are public information. You can bet those lists showing who is pulling however many permits, are closely watched… by a lot of people.
All I’m saying, is the same house can sell for tens of thousands more (or less) in the same subdivision as one sold a few months ago. So there are many factors indeed.
The market seemed to like the March numbers from LGIH, stock closed up over 12% today.
Maybe Mr Market is finally starting to believe that the oil patch slide isn’t going to affect LGIH as they expected (at least not yet).