Thread: O.C., CA. builder gets 14% higher prices

Published: Feb. 3, 2011
Updated: 3:03 p.m.

O.C. builder gets 14% higher prices

By JEFF COLLINS
THE ORANGE COUNTY REGISTERStory Highlights

Article Videos
Irvine-based homebuilder Standard Pacific Homes reported that its customers paid an average of $495,000 per home built and sold in California last year, a 14% gain over the average selling price for a California home in 2009.
The average sales price for a Standard Pacific home companywide was $343,000, up 12% from $306,000.

The announcement came in the company's fourth-quarter earnings release showing that debt reduction pushed the firm into the red for the first time since last winter.

Meanwhile, the firm announced Wednesday that it plans to open 55 new housing developments this year, 35 of them in the first half of the year, thanks to a recent land-buying spree.

Currently, the firm is selling homes in 134 developments in eight states. But the homebuilder has been taking advantage of a strong cash position and lower land prices, acquiring around 5,400 additional lots worth $315 million in the past year.

Highlights of the company's latest financial report include:
•The company reported a net loss of $21.9 million in the final three months of the year, due mainly to $23.8 million in refinance charges related to paying down and restructuring its debt.
•Had the company not had to cover refinancing charges, it would have ended the quarter with a net gain of $4.3 million.
•For 2010 as a whole, Standard Pacific reported a net loss of $11.7 million, again due to the refinancing charges. Minus the refinancing costs, the company would have had net profits of $20.6 million last year, compared to a net loss of $13.8 million in 2009.
•The debt restructuring allowed the company to pay off notes due before September 2016 and to reduce its overall debt to $90 million from $665 million.
•Nonetheless, many indicators were negative due to "weaker homebuyer demand," company officials said. Homebuilding revenues, closed sales and new orders all declined both in the fourth quarter and in 2010 as a whole.

http://www.ocregister.com/articles/gets ... rices.html

These kinds of stories that although on their face make one optimistic that good things are happening, fly in the face of logic. High unemployment, nervous investors, banks going belly up and a general economic uncertainty don't paint the same rosy picture. Those who read these stories about a rise in new home starts or builders that are making more money and conclude that the economy is on the mend are deluding themselves. These stories in general, IMO, are fabrications and a poor attempt to put lipstick on a pig.

For some reason some people don't want to believe any good news that comes out about the economy.
But some of us just love good news, even little bits of good news here and there.
I guess it's hard to see good news from far away with a negative view, but much easier to see it up close and in a positive reality.

Construction starts on Mission Valley's largest development (San Diego)
The Civita land plan calls for more than 4,700 homes, nearly 1 million square feet of commercial development
and several dozen acres in parkland and open space.
http://www.alipac.us/ftopict-219903.html

1,400 New Homes Planned for Santee, CA. (Near San Diego)
http://www.alipac.us/ftopict-227247.html

More good news.

Stocks have nearly doubled since the March 2009 low

http://www.alipac.us/ftopict-227300.html

Originally Posted by JohnDoe2

For some reason some people don't want to believe any good news that comes out about the economy.
But some of us just love good news, even little bits of good news here and there.
I guess it's hard to see good news from far away with a negative view, but much easier to see it up close and in a positive reality.

John, believe me, I would LOVE to see good news as I've been out of work for almost 2 years now and am getting quite concerned about job prospects. As long as unemployment remains high though, it means far less money being spent, far fewer taxes going into the pot and far fewer homes to be purchased. We are about to go into a big hole as I believe that many more homes will foreclose and create havoc in the housing industry. The commercial property business will follow closely behind. It's just simple economics. None of the news about an improving economy and new home starts means anything when you're unemployed and desperate. Also, it creates no public confidence when our current administration spent so much time focusing on overhauling healthcare rather than producing a climate whereby jobs are created.

None of the news about an improving economy and new home starts means anything when you're unemployed and desperate.

Actually it means that there are more jobs and more money going into the economy to produce even more new jobs. New homes being built means jobs. The appliances needed for the new homes means more jobs. Lumber, paint, carpets, roads, landscaping, etc. all mean more jobs available.