Smith Douglas Homes (SDHC) 12 Nov 242024 Q3 Earnings call transcript

Thank you for standing by. My name is [Rebecca], and I will be your conference operator today. At this time, I would like to welcome everyone to the Smith Douglas Homes Third Quarter 2024 Earnings Call. (Operator Instructions.) I would now like to turn the call over to Joe Thomas, Senior Vice President of Accounting and Finance. Please go ahead.

to conference welcome Douglas for and Homes. morning, the call earnings Smith Good press outlining Investor discuss this the issued or our found release We a homepage. at website morning at and can of investors.smithdouglas.com the which on of our call selecting third XXXX, our link we today's will the on by which be Relations quarter for results bottom Investor call will be Relations the section this on of note, Please webcast website. our simultaneously

in everyone future begins, that call, performance by update call Before these known operating results I Actual on undertakes unknown due historical differ materially to and statements law, to remind could no goals statements. from filings. statements duty statements. risks, would and this certain the which such facts, Except as like made including financial company's the and the not are SEC forward-looking statements as company are required concerning and other to detailed forward-looking uncertainties important factors

financial CFO. non-GAAP our website this be Hosting press on located of GAAP Devendorf, call release found our the in CEO and reconciliations Russ SEC the call Bennett, can comparable Vice most measures turn our call like now company's Executive Greg. morning President and Chairman this to and Vice filings. measures are Additionally, and the our to the I'd on discussed to Greg over

Smith home deliveries to rising turned quarter $X.XX quarter home a another The in or Douglas everyone. driver to share. quarter $XXX.X profitability deliver to closings $XX.X closing year-over-year morning generating on revenue XXXX, of of growth third for primary million. good led these with pretax These record in our diluted solid and the Joe, continuing XXX, income results Thanks, new per to plan of million of of XX% our company. was

sold. the impact margin at performed possible reducing in of Despite while able to remaining gain our sales strategically been where administrative by the guidance on leverage during also quarter. Order the revenue falling seasonal caused homes we our rates, the range our with of high front sticks and XX.X% on normal XX.X%. rates. bricks the the mortgage also general quarter interest cost focused the our of high selling, continued at with operating expenses and in have for activity patterns able margin some on of movements gross to followed quarter costs SG&A coming price We're in with to well We variation end take home

election. outcome the of We local optimistic much rates about in to hesitancy selling or household see these September to temporary to concerns did We in our demand time will lack of economies had further our inventory, October the the uncertainty of as season prove macro come believe the spring in be efforts for cleared be and home that in will up beginning expected a market the to many next issues steady healthy people continue growth year. headwinds and strong down buyers sales behalf driven of experience existing trends into in on by some markets and We formation.

our markets. we our in foothold more established also made presence a solidifying better while During the quarter, markets progress newer in gaining our

The unit future Carolinas contracting issues of Atlanta make Houston up perform for softer. some additional in face and continue and was do held Georgia markets, well us a but a biggest two Alabama, we headway Our to while during lots. to from Central perspective, We continue operations affordability and further our delivery of little Chattanooga hires the demand steady in quarter, with ramping in Alabama.

as operational customers expansion been We deliveries and deliberate great company's geographic platform very remain scale. Driving growth construction this company's in this size model recently it strategy. market, land will this five with growth targeting that the arrangements, proven process that is option adhering hired our philosophies already homes increase we division personalize thoughtful prospects to land industry. under a timely and new serve via work [Type] lot grow the quality the with to and in partners to we've existing affordable excellent have Greenville, and offer We and that their streamline presence operational efforts, Carolina and believe early where will prices, entered ability Additionally, our our operational at inception. have contract an since long-term fit agreements focused have to markets deals and be XXXX. president long-term expect we are to our homes happy new to We've allow believe a announce South and deliver in the same success land on and key their our successful manner. banking homes our in the

year times XXXX, Cycle XXXX. the we even most that believe of and we're goals pre-COVID great instances, As delivery into our achieve end are and to into their levels the momentum in we head better. position markets a carry some for to back in in

communities will sales. of We us that spring help scheduled to season open drive have ahead new selling several we believe

have offering of some of advantage the homes of of the most any priced the publicly also homebuilders. traded We affordably

gain and shape, a Our share. have remains we real market to balance in sheet in great opportunity

to year. and detail future I like of quarter turn our outlook company. With that, update the our positives, to this the for will optimistic our who I'd give on very over call an the the provide on performance these industry Russ, remain Given about and more

Thanks, expectations for touch highlight for some XXXX XXXX. Greg. I'm thoughts high-level year quarter and with fourth some our results of full and the conclude on outlook second for and to for the our quarter remarks going and my

than closings third with price a increase of period of quarter $XXX million revenue, closed on Greg As XX% finished the on we ago greater for from sales year average mentioned, the an $XXX,XXX. homes XXX

guidance and for for million were net $XX.X previous was of our the revenue. quarter. of the at XX.X% was gross the with these income better Pretax was SG&A margin or end income quarter. Our $XX.X expense of All high XX.X% million results

Given income tax the ownership Douglas Smith our attributable of statement. our an net of related structure, is income and nature income primarily organizational by shareholders of the our of rate our public the economic X.X% reflects is Smith held Holdings to to Corp Homes that XX.X% face This tax income [Up-C] reported effective the on expense LLC. Douglas

evaluate and We more industry is and quarter which more income and a Our operating net that adjusted from blended a public believe we useful effective it investors non-GAAP metric net organizational and comparability our is assumes to our XX.X% that performance measure given may income, rate structure million traditional XXX% is structure subchapter as we a to for and as $XX.X if corporation. federal useful tax is had state have believe operating tax ownership a because peers effectively adjusted organizational allows C management an standpoint. a the

in financial increase You structure information of and and income higher third taxes finished can of quarter of XX% XX,XXX the of the our footnotes third XX% quarter under than about our quarter the lots, statements. We year. just controlled over an XXXX with more find total this second

of approximately based expected quarter run As we of quarter the margin closings. controlled gross average XX At our $XXX,XXX to we as and of elevated previously the contract years rate highlighted, we last typical with on X.X of lots year. backlog at supply XX third of the in an option price on X.X the communities Greg out the operating into active homes of and selling with XX.X%. end homes finished of an selling were those XXX enter We end quarter, forward lots be to new under year versus the would from expect markets, expand third of

the facility of at balance equity. Looking and borrowings $XXX million million $XX with stockholders' sheet, our cash credit quarter no million we and approximately $XXX revolving our under ended of

X.X% our debt net book Our was to growth capitalization We positioned million was credit to unsecured on are available and well debt approximately previously and X.X%. to facility net capitalization execute on strategy, as book our had $XXX Greg mentioned. negative our

home outlook to homes sales for fourth anticipate Now and average gross at quarter year between XXXX. fourth between are home margin full XXX of X,XXX our total XXX X,XXX range for full Based and of come summarize between and XX guidance, XX.X%. the $XXX,XXX to fourth and our the like with price the in and of I'd projecting year midpoint an closings finish XX.X% prior increase closings XXXX aforementioned an we than on quarter homes, in We the for the $XXX,XXX closings our higher or quarter now guidance. X% to approximately

and We additional between decrease now to our home price to $XXX,XXX at and finish closings higher margin $XXX,XXX closings margin. prior lower a to forecasting slight guidance, are XX.X%, which primarily gross between average a our end of due is to XX% to expect the our the we selling range

approximate full previous ratio our in XX% expect of improvement XX basis now For from point range the SG&A expenses, an and for we be the to XX.X% year, guidance.

our which our if until did with that earnings next XXXX process While be division with won't year December, review not we remiss are budget wrapping still next some expectations management, would given for we provide Board on March. I our I in our color we will hold up call

control Before getting and process which committed our there as to analysts as beyond IPO during we investor providing to our will that that business forecast. our we community caveat impact reasonably much this our numbers, are into But the year. transparency can committed I many and remain factors earlier first our must possible, to

we Sitting remain direction too mortgage move long-term optimistic to current which new too given X to and across Housing here and our the of rates continues biggest over country. at challenge home to affordability today, on, As and months. the markets. difficult XX is housing next gauge about Greg touched the the pace it early projected will the in supply previously demand lack remain

us, we in preliminary that behind this specifically for Additionally, administration's XXXX X,XXX production. With to assuming have finish it election the policies impact to of our impact of potential while and and cost range midpoint immigration on X,XXX will closings too near homes, the also said, the guidance. be expectations tariffs what to the our XXXX and on our is industry are determine on is early

higher guided, XX with margin continue now either As error due we have we a expect will compress to margin of to gross and side. previously a gross XX% of costs, would margin point land target to basis

believe on for our primary bring relatively all remain of maintain would from to around communities We closed to sales range lots projections the to to risk anticipate and within our $XXX,XXX ability a of $XXX,XXX and XXXX. new pace our we ASP online. be our homes flat are Lastly, and XXXX

mentioned have numbers. With the As that, call see to jobs, we I'd over have also some I around continue primarily impacts every our unforeseen inflation Q&A. could on on on factors, municipalities to rates turn for instructions Macroeconomic to the to and with interest and [platts]. permitting like call, delays operator

Dahl Mike RBC of Instructions.) Your Capital line with first comes (Operator question from the Markets.

for Russ, assuming those where lots all pieces. kind we the opening I spring When from in pieces, Greg, Or that Thanks, still very how moving think you Is thoughts market up sit today, you potential about that the out, to off? and the that numbers interpret on in should and kind view XXXX. Russ, understanding on numbers as is the want quo given some moving a deliver? we on conditions remarks kicks that? early, embedding the comments threw just of are pick the you status that some improvement it's of market of these

what But it's happen. in a may perspective. market not seeing just We're what thanks, with not from -- consistent today Mike. we're may or assuming major That's any Yes. shift pretty

right Just now the It's great I would now. XX what a it's -- the kind days, past tell going is to again, days. based the what and we've this -- difficult we've And for through XX project rates, elections, that roll-up budget we're with such seeing a of because look, been you, divisions the on fact last it's had we're it's year. from process interest

with it's But down choppy been last guess But towards little sitting if bit come the bit more best I'd the improve, our towards But more here lower and we -- a couple a see yes, certainly, higher the if things the certainly shakeup a end. of look some of think kind jobs, I of probably little -- months. if rates today. of end to sure, range. that's things

So guess again, just status quo. kind of best

the lot count Obviously, kind bit. your delivery for appreciate then I under markets. Yes, little a with a topic, in community both lots existing plans that stagnated it. Got when lot of you're and community you've a about And sticking there. new a similar thinking put control, is there's guide, balance of openings, Okay. of

on back sneak about of give quantify of kind looking one, I in So, us versus could you know an us you're help XXXX? ramp envision in help lot XXXX. just then I next on past, for at on if and And kind year understand talked Can cost the it the you what the -- as us lot different update what a comment. into but this we've through cost specifically

Sure.

I it'd XX% it a online got be think, think we've half again, at more there's community schedules, communities we communities, expect -- looks in year. count increase back I And coming lots coming online the fair to of like when in community lot year. next look our the of our

XX a a deal months get us online and some coming -- of lots, then online. lots some it's It's to you this because ramp-up get to is significant in of think like yes, and And those communities and public, it takes a XX once LDP putting lots going contract under more community we we've -- us if had now about control. putting for getting

that, So I'd growth. that say of that's part

though not not in all might those and absorption. going the the XX% are delivering year, with full be even it's we to might mind, end year by end -- of of coming a You that keep online

of then, lot on question So, that's ahead with costs. the your ramp. yes, kind go And

costs remind quantifying in look you kind lot and on to as us what -- XXXX? are that Just at what how your it like the refresh compares look us today, XXXX going of to or average

Yes.

the XX.X% by around And costs, a have and of big the will that's points. when continue telling about, there's of this compression bricks, and And the you homes compares that And of right for two, in square Sticks start that's I relatively be like lot I'll driver which basis to year, flat. of it's were our last last So flat, and and revenue. we've and day, about lot quarter been at the revenue. really the bricks was flat is seen margin at footage so relatively would $XX,XXX, in just other three years. you in were talked -- been big we then cost it look we $XX,XXX and XXX our was also at because our we sticks the XX.X% about looking driver and

costs, costs, control vertical which been really and it's and all to we've the So, really great able our cost. subcontractor is lot the

so, go $XX,XXX towards year, we is up another lot. think the $XX,XXX to going And to we as that look next per lot cost

flattish again, going keep flat. in that or there's erosion somewhere And to assuming that be we so. it's So, mid-XXs assuming And margin. your those that's, a again, we have ASP, pretty can vertical costs

JPMorgan. comes next with question from Your Michael the of line Rehaut

is relatively thoughts to potential the Yes. to get next your to incentive I This Mike. on the forward. on thoughts Andrew if not for going assumptions you for of I'm guys. -- your love for sure quarter. you the hear know on year. I'd kind alluded on Would Thanks that. love it's load Congrats on small

Yes.

already of little going adjustments us. kind this price the adjustment running into creep. big closing time. seen The sticker is and closing for half We're side, discounting wildcard. for really rates, I to and baked lot that we've of interest for a price It's next little X% again, are basis less those incentives slightly give when just that's price. the it's rates the been about think budget incentives. X%. of where assuming but than of over mostly actually some And continues bit on of to XX So We're lower Fed we actually and looking kind Obviously, incentives, more be It's year-over-year, were flattish about price between we mortgages the costs year, closing are at that are the the which a points, cost that just year-over-year, adjustments on is down over our incentives. a costs like

who like of early with it's rates feel policies, going. positive, a to certainly really hopefully, knows, it's clearly, and in remains out change be X then administration so, remarks, tell. to too in next it's said where but seen. net Like to And are real we to direction difficult. I difficult those more XX And the the Way months, the the figure prepared of the some

it. about the how less changed Can a looking is anything environment Got you turning pipeline And in M&A and maybe what talk has to then And environment. seeing you're maybe the like? regulation there? strict

federal regulation stuff. that of typically definitely we getting with Look, is think as go go the come of through through have in a certainly zoning process municipalities and less out as to M&A agencies Sure. we we it's hopefully, whether that the positive and just and dealing the all put -- will we this, that us

packages front, then fares I economy there. healthy going So, seeing that come to might mentioned, we've seen specifically really the across of We a deals way little it doing just We're There's Greg be pipeline. our previously. through now. forward. the And we're always M&A pretty helpful. opportunistic, how did that's to should still greenfield as right a go our Greenville, look, start-up. market, rich standpoint, said think the enter, from We're desk. be out the We're be Again, going definitely a Carolina. looking. on But yes, going too that general South We've as

did opportunity we But front. new our business just of for the us last is we're up year, at through everything a not on start-up. seeing done in So, the look and model M&A we've Houston markets, until some we greenfield deal plenty as

that with, But very takes looking a some seeing that's So, ramped bit keep deals. greenfield. up getting the more confident but probably It open. We'll at clearly, our markets. we we're proceed But strategy is yes, we're little in longer, in yes. eyes will

the line Wells of Sam from Fargo. comes question Your next with Red

still we week call it of election. that, early ahead to point conversion thoughts remarks, it, coming off a seasonal, election a bit early, the on the In bit And finer on let's the are, as that cadence. touch where buyers but off the like it's have mindful sounds September into on especially more I orders might the put then to know was of here. in buyer a it a be traffic wanted Any like pulled QX? October, prepared we're should order it November but we sounds I back election modeling wanted in and

to Buyers the Sam. were assume into question. traffic seasonality. did for Traffic only October. tied more were Thanks hesitant see will there followed and with probably that slower. that I more and The incentives decisions. September Yes, can kind like softer maybe conversions a the lot We thoughts buyers. assumption we be election thoughts the around, was that's should to wait of of That's opportunities that mentality. an make

you as but week, had slightly up. -- said, than appointments been have traffic. we We What's our it's traffic were early, better seasonal last good maybe encouraging,

-- future, too that's the but uptick, yes, And see going typical still taking to be They're optimistic. conversions. to to there's to going back. So, indicator, me, an some the but think maybe converted. buyers I say any early to longer get us to just for much of we're We're meaningful reluctancy we're come getting it's

on can any better able through place? then how mortgage you talk helps. your target mortgage give maybe know program recently going JV buyers. wanted a in that's announced And time might for that I the financing your formal perhaps But it's No, more been I a streamline to you coming. with probably mortgage I JV. process be to to believe long color incentives your also, us

Yes.

do capture really lenders. partners. and have lenders consistency lenders will trying really a We've business, we're us takes biggest it's of more for those across to thankful for our thing help are They consistent. But in keep of the getting difficult there time preferred platform. difficult XX really And relationships. It's my the actually kind at we much been preferred the roughly to years those been be were It's to management and for at kind -- -- had XX divisions and good. have the corporate I it's good footprint. that I manage to things in that look, stats real It looking think in lot the it. think preferred the across -- the for of us,

So, but big that, bring partner country. without rodeo. the I is think all certainly, with saying, going builders. across choosing a across us operate for the their And to the loanDepot. They then for reason loanDepot they biggest That was goes big first This thing the us consistency some other that's isn't footprint.

definitely So, growing set the support to they up well and business. are us

that So, look, be the some be process and we're no even venture, But having relationships process builders capture really about excited doubt, through a process. going financial this getting getting to it's dollars the our but and about lender controlling great. loanDepot, us, the the helping about joint add to partnership. as mostly first yes, that table it's the going it's that we going foremost, work to you, consistency would to for line, and bring to really of controlling lot the bottom most and buyers closing the and preferred Sure. It's to is partnership really tell closing that smooth table. And a

So, we're pretty excited.

question with next McCanless Securities. of from the comes Jay Your Wedbush line

So it much expansions, with be of XXXX? Greenville Russ, thought like you a too I-XX Because like to talking what of as look some to the SG&A all any Chattanooga, to greenfield corridor, sounds doing between buying or for but get lot about percentages lot greenfield, a details, dollars new what going the and dirt. you're are into doing with not

thoughts So, would SG&A be helpful. any on

[land the side President division and -- some We've in got folks hired SG&A I Yes. revenue. office We're as some we're well space. going got on land put percent going variable act] a development XX% We've we've obviously, mean, then some going to on to and this more the finish, fixed to at somebody somebody XX.X% I year Greenville. we're I put well, We're quoted Yes, think in. the side. looking as overhead to of -- on

obviously, business range we're to sure to are And revenues from hoping next volume But in at a center least the pretty I XX% on there's now that's stay flat, -- if definitely think add corporate going be of G&A. the year. we're to so some relatively grow yes, there's there ASPs don't right perspective. grow some XX% headcount for the going -- I on G&A the growing to unit somewhere we to revenue. is without ramp lot think side. good And a And the the support

be more opportunity we points. would maybe I'd XX to see here when of it's I didn't get -- down add XXX if you leverage I XX.X%, going some basis overhead, to greenfield love the also that G&A. we're surprised So, to it's to these basis points we'd we love to tell hard and say to definitely but opportunities sit going are some to looking at are that mean

that's So, if year, you're I'd if next and model a target get good look, closer to we going something. probably can XX% try to say

thing getting closings realizing the some in add Chattanooga Jay, and of Chattanooga, the was already there lot And pick I'll there, is up lots. we're there offset. majority One finished

So, vertical those most we're already into all neighborhoods. in production and

pricing? could power. communities what of able you question were break I second guess percentage And maybe guess, I That's last pricing on raise great. quarter versus this incentives were you base and XQ the year? to Okay. what out

Yes.

know to is looking So I the And raised you can and clearly, incentives. and where we down, slowed you And maybe we took on some -- able we Joe, actually an he's actually can did here, I'll he's it on we've exact, it had. can cases, analysis I base up, down. Joe actually taking prices but And pull where communities it we prices were touch just -- if tell decreases. as after back up, right? price Third communities give not fast the -- in quarter, some you get to actually, but we or call. we base as did were raise in

mentioned relates of our X% closing adjustments questions, than to price I compared we year. incentives, of that were on price coming and A mortgage X%. was on from less year, it I than the As over then -- was basis and XX adjustments and the that incentives, and incentives little this the credits last and between were of And and stuff. some half prior actually of closing that third is one think cost down last closing greater points buydowns that's side, from cost half quarter about just

So, And bit, between adjustments down were it overall, up. a was look -- closing we then down. but two, it cost incentives the that price I'd came But actually was have were to it's saw slightly the I been but in the me, we to I about second flat think you, want costs second probably don't up quarter. have where bit. Closing little have quarter I a from tell might of front the

-- it's did price but the haven't certainly, prices I'd it quarter-over-quarter. quite We So base again, were which mean, has we seen at bit. I decreases speed we raising some move, say and see definitely materially slowed a

the So, we're get as definitely towards some we little as buyer a -- seeing election, the of and more mentioned, choppy quarter, headed third Greg effects of hesitancy. kind we

doing plans, there, affordability I How what are that attacking all guess all options smaller floor Great. taking whether are challenge? Okay. And some issues. then you it's Alabama, on the last question you had, Greg, you out? I some touched

qualification margin I on we're So, side it's and to needs. and buyers' size, making we up just homes meet are plan more but mean incentive on margin. the focused the the pace keep to giving

question next Bank with line the of Rafe of from Your America. Jadrosich comes

on I the comments gross to I on appreciate the all XXXX. follow just margin side. wanted up

like is think little year. I next sort your above a planning Can And if to it you said range maybe you're backlog now feel I that heard just land confident you and what in you it have feels still price it net but that visibility you can like assumes have for that. on? Obviously, into stay sounds you bit XX%, talk what of about right. offset you inflation, XX.X%, like inflation

puts takes the and us there? help Just understand

Yes.

sitting in now cushion is a with more right backlog rebates could little our XX.X%. at There So be there.

prepared on with, side. best The happen and I points again, we XX margin early And policy. so there's basis hey, of with here like and a mean, can to either we to rates what's again, there. tell error margin and ton going a guided say caveats of remarks, in I We're sit so gross the of on -- is, mentioned XX%

what we've north But it could trailing -- still seen things -- at still we actually selling we at little look of and XX-week gross that bit. So, come XX% it's in And where on sales, today. our look in here XX% going. our sit at last we down margin are we're a as

to into of backlog close we we we're we're end XXXX. in how in say the closings to going depends going and come to to about year to and be -- this a love So, our much lot we'd what year, sell balance love close go the what on at, see of we'd hope but the X/X of the that of

if capacity. before, And are so, costs XX.X%-plus as assuming the at of if if of And more cooperate, closings really could less operate, land lose just more at then the over just margin again, continue considering kind how year. XX% to going are are mean actually I or market builder, make with we you a you baked, But that's we compress sure. throughout full flat lower. the market. and sell we know we to which about that a we've can pace imagine We bit we're margins right? doesn't that we But be already talked sitting little price a

going. we're so or focused our really manufacturing operating on And machine keeping

or that -- we'll that's down really be so our hit is margin to -- we And up dial what have is to going to the velocity.

said it's perspective. quo from like here market today, just it kind I just really we sitting But depend. of status -- a expect, So, earlier, going to

you just on Devon and in of can for about like margins relative to and the the then what side? overall Street the you're That's talk helpful. acquisitions Houston progress how that -- terms margin the what And seeing

We've were a And where phenomenal -- well think could and to XXX% we've obviously phenomenal now has Smith it's integrate of many actually and and I acquisition, system as team Douglas year. done transition, we probably have our XX%, -- -- and folks the it's our say process, It's of to -- could systems. for gross. been good want to But lose one it's I huge of are them the that a Houston Sure. changed our around over XX% has the rebranded overall almost job as expected. we of team they neighborhoods. didn't into just as and credit We The they done product thing, entire folks. the on year, a team it's over in the job. in a really the trying

well. actually gone it's So, real

mentioned, a in Houston little been half the Greg slower the back year. as of Now bit has

First part this we it's to half of slower. great. sales XXX closer bit were -- of today. closings the I sit out to year, the a I'd as our say here as high of think I definitely But they range we'll of been end year, Houston get mean, XXX will the maybe projection,

So, it's us. real acquisition a it. phenomenal We're with been happy for

from Your Alex the of Center. line Housing next comes question Barron with Research

And in Yes, that your ramp-up I guys orders would What next just progression implied X,XXX quarter. a XXX is there? other -- guidance to the there? about up Or hesitancy, see away thing are an is how guys I comment to was that only maybe those do to numbers margin just to year. there for maybe it go do bit guess Or X,XXX the pace? the you community is right rough a the the you given and things you increase thinking get of where the gave think to now count? lower about little imply comment XXX dialing at needs to get on back you

issue great like if demand those quo. under move real and kind get certainly way the certainly as the of rates to if have half the assuming I And question. issue. jobs, the -- lots rate here or -- the today. that thing and job really I'd or control market in control, picture. risks be Yes, with look, affordability slows those growth I to difficult for jobs land getting of say of volume numbers. it I end right? We've come a some guidance. the it's is and been But other for which second about forecasting say next and the and been are at maniacal definitely are to Alex, finished the online under getting down policy say I'd assumes to numbers, we're come focus the we're mostly are factor see year those going have next we're around up market back and picks is the It status biggest a we always great, I the biggest and we for ground to actual internally, going tell specifically, to closing unit can homebuyer thanks would And that land that it's and vertical definitely you of it's those from construction. our building more about thing looking what's it And But the XXX% could of year be hit potentially unemployment, And start hasn't to There's next It's and communities just to do and to year, I'd the perspective then do so better. demand So, that would you, times that lots lots is be can think to -- the the -- year said, push sitting right? the able lower a itself that doesn't market demand one we -- cycle another. -- when -- the biggest a solve we for homes. buydowns comes that really strongly that big we've incentives -- the on cost We

on getting around dive that and And so, time lots ground. focus lot and a we're process taking on really deep the a cycle the

Greg Instructions.) (Operator the to now call will back for turn closing over Bennett remarks. I

great interest of earnings a you your everyone Thank for with to for call Hope today. share everyone, you has the questions. you, on I each the day. today. Thank the appreciate opportunity

Ladies and for you Thank today's gentlemen, that concludes all joining. call.

may You disconnect. now