HB Cancellations from Backlog Skyrocketing????
June 16, 2008
– Comments (5)
SPF reported its order trends tonight. Remember, and order is just that, an order....some builders call it a sale....but it does not become revenues until it closes.
Last year SPF had almost twice as much backlog at the end of the 1st quarter as it did this year. Approx $950MM vs. $500.
Thus with net order rates tracking pretty close, SPF cancellation rate as a percentage of beginning backlog is much higher this year than last year. It appears SPF's cancellation rate as a percentage of backlog is approaching 40% vs. about 25% last year. Almost one out of two homes in backlog cancelling....wtf???
Is SPF being more agressive taking orders to make the order rate look better only to have them cancel before closing?
Hmmmmmm???
Remember folks, anyone can take orders, it is much harder to close. Further, we have no idea what prices they were taking those orders at....we do know that they are liquidating entire communities at over 40% off.
It would have been nice if they provided an average selling price for those orders...ya think???
Now the question is whethter they losing $$$$ on every order????
And think, this is the kind of disclosure they give to shareholders that they will be asking to invest tens of millions of more dollars.
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