<<FWIW, between sale and close there are healthy cancellation. I think the 4Q had more than 25% cancellation.>>
Since I have been around the construction and real estate business for a good number of years I do have some knowledge of the industry although it’s been a few years since I have been active being semi retired and I also don’t have much direct experience with new homes sales so beware.
I am not sure where the heavy cancellations are coming from especially 25%. Did the company provide that number? I can’t imagine in the real estate business a 25% rate. In a tight real estate market it is hard for me to picture that one out of four mostly families I assume choose a home they like sign all the paperwork, place a deposit (I assume) and then back out before closing. In existing home sales the deposit is not refundable, believe me a lot of behind the scenes work has gone on to complete all of the details of the sale. The family on the other hand had their hopes high on a brand new home. Something doesn’t seem right here, are the salespeople not doing their jobs by “selling” homes to tons of prospects that aren’t following thru to closings. If they are losing 25% of the customers between the sale and the close that ain’t just ain’t right as we say in Missouri.
long LGIH