What Cold Wave? KB Homes Reports Strong Demand for New Homes
Home buyer traffic accelerated in February and despite the severe winter the housing recovery is continuing, according to KB Homes president and chief executive Jeffrey Mezger.
“To me it is the kickoff of a fairly normal spring selling season,” Mezger said Wednesday during a conference call on the builder’s fiscal first quarter results.
The Los Angeles-based homebuilder delivered 1,442 single-family homes in the quarter that ended Feb. 28, compared to 1,485 homes in the first quarter of 2013 when the winter was much milder.
Builders have been busier this winter than most people thought, says Wells Fargo Securities senior economist Mark Vitner. “Things have not really slowed all that much, despite the tough weather, and builders have stronger order books today than they did a year ago.
“There is very little doubt in my mind that housing is going to improve over the next couple of months,” Vitner said Tuesday during a webcast.
KB Homes operates mostly in the warmer climes but it has a large footprint in the Central region of the U.S.
Buyers ordered 1,765 new homes in the first quarter with a value of $600 million, compared to 1,671 orders a year ago that were valued at around $500 million. The builder had a backlog of 2,880 homes as of Feb. 28, up 4% from a year ago.
KB Homes reported a $10.6 million profit for the first quarter, compared to $12.5 million loss a year ago. The company has been profitable for the past two years. However, the most recent period marks the first time the builder has reported a profit for the first quarter since 2007.
“I view this as a positive inflection point for our business. One that we intend to build on this year,” Mezger said.