Q3 2022 Century Communities Inc Earnings Call
Good day and welcome to century community third quarter earnings Conference call.
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I would now like to turn the conference over to Tyler Langton Senior VP of Investor Relations. Please go ahead.
Good afternoon. Thank you for joining us today for century communities earnings conference call for the third quarter 2022.
Before the call begins I would like to remind everyone that certain statements made during this call are not based on historical information and may constitute forward looking statements.
These statements are based on management's current expectations and beliefs and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described or implied in the forward looking statements.
Certain of these risks and uncertainties can be found under the heading risk factors in the company's 2021 annual report on Form 10-K.
Supplemented by our other SEC filings, our SEC filings are available at Www Dot SEC Gov and on our website at Www Dot century communities Dot com.
The company undertakes no duty to update any forward looking statements that are made during this call. Additionally, certain non-GAAP financial measures will be discussed on this conference call.
The company's presentation of this information is not intended to be considered in isolation or as a substitute for the financial information presented in accordance with GAAP management will be available. After the call should you have any questions that did not get answered.
Hosting the call today are Dale since asking chairman and co Chief Executive Officer, Rob <unk> Co Chief Executive Officer, and President and David Messenger, Chief Financial Officer. Following todays prepared remarks, we will open the lineup for questions.
I will turn the call over to Dale.
Thank you Tyler and good afternoon, everyone.
We're very pleased with our strong performance this quarter, including $172 million in pre tax income.
Net income of $144 million and diluted earnings per share of $4.44.
To achieve levels of pre tax income net income and earnings per share were all third quarter records and represented increases of 18%, 27% and 34% respectively from the prior year quarter.
Our third quarter EBITDA came in at $189 million or 16% year over year increase and another third quarter record.
During the quarter, we delivered 2630 homes for $1 $1 billion in revenues, both third quarter Records.
On a year over year basis, our average sale sales price increased by 8% to $425000, while our deliveries increased by 13% led by our Texas Southeast Consensually complete segments.
With regards to hurricane and we want to first and foremost express our deepest sympathies to all the people and communities that were affected by this tragic event there.
The hurricane had a modest impact on our total deliveries in the quarter.
And we would expect additional impacts in the fourth quarter due to disruptions to the supply chain.
Municipalities and labor availability throughout our Florida and southeast regions.
Our backlog at quarter end consisted of 3455 sold homes valued at $1.4 billion.
Net new contracts declined to 1318 homes with weakness across all our regions as we believe the rapid increases in mortgage rates and overall economic uncertainty kept many homebuyers on the sidelines.
The summer season for home buying is typically the slowest period of the year.
And this trend was especially pronounced this year as many potential homebuyers simply took the summer off.
Regarding trends in the quarter net new contracts increased each month throughout the quarter with this improvement in sales pace continuing into October .
In fact, the sales activity we experienced this last weekend was the strongest we have seen in over six months.
However, we expect home sales will continue to be pressured by the volatility that we're seeing in interest rates.
We believe underlying demographics remain favorable.
And as rates stabilize buyers will return to the market as they adjust to these changes.
While a 7% mortgage rate is clearly a large increase from levels at the beginning of the year.
Mortgage rates averaged close to six 5% from 2000 to 2008 and a little over 8% in the 19 nineties.
Homebuyers are continuing to look for homes that are closer to completion in order to lock in their interest rates and our sales continue to be impacted by the fact that we simply did not have a significant number of homes available for a near term move in.
Going forward our plan is to continue match our starts with our sales.
Focus our sales efforts on homes with more near term completions and.
And not start building up significant backlog until we see a sustainable improvement and demand.
Sandoz unclosed homes in the third quarter increased as expected to about 300 basis points of average sales price.
The type and amount of incentive differs by community and by market.
Our focus on operational fundamentals enabled us to produce solid gross margins of 24, 8% and adjusted gross margins of 26% in the third quarter.
As expected our gross margins eased from what we have characterized as unsustainably high levels.
With higher incentives being the largest driver of the decline.
Looking out over the next couple of quarters, we think margins will over correct as our incentives are now meaningfully higher than they were in the first half of the year.
While our costs on new home starts are just beginning to ease.
That said, we do expect to return to more normalized homebuilding margins, possibly in the second half of 2023.
Rob will detail more fully in his comments.
We are well positioned to navigate the current headwinds given our emphasis on delivering affordable homes and the flexibility inherent in our model.
By offering homes at the lower end of the pricing spectrum, we can appeal to the largest number of potential homebuyers and.
And to the homebuyers that are buying more out of need as compared to a move up buyer, making a discretionary purchase.
Our spec based model also allows us to adjust starts and react quickly to changes in market conditions.
While it is still early we believe this cyclical downturn could potentially create opportunities for century, given past precedents.
We remained profitable every year during the great financial crisis, where patient and ultimately acquired assets at attractive prices and emerged as a stronger company.
Our third quarter results are due to the dedication commitment and resilience of our talented teams across the country.
They continue to support our mission of providing our customers a home for every dream.
And we thank them for their contributions.
I'll now turn the call over to Rob to discuss our operating results and plans going forward in more detail.
Thank you Dale and good afternoon, everyone as Dale mentioned, our team performed well this quarter and we believe the flexibility of centuries operating model and focus on delivering affordably priced homes positively positions. The company moving forward in this higher interest rate environment.
Our homebuyers continue to have a healthy financial profile.
Century communities and century completes homebuyers had respective average FICO scores of 736% and 709 based on loans originated by our mortgage company in the third quarter.
We continue to have a strong position within the affordable new home category with approximately 80% of third quarter sales coming from homes priced below FHA limits, allowing us to target the widest range of potential buyers in any given market.
As expected we saw an increase in our cancellation rates in the third quarter to 35%.
Cancellations, we experienced were both financing related and from buyers opt in to walk away from contracts given the overall uncertainty in the market.
Our cancellation rates declined as the quarter progressed with September ending at 28%.
At the end of the quarter, we did not see a significant increase in our completed unsold homes across our 45 plus markets compared to the end of the second quarter.
For the industry as a whole while new home inventories have seen meaningful percentage increases off very low levels absolute inventories of completed homes remain below historic averages.
Additionally, we think existing home sales will be constrained going forward as buyers will be very reluctant to walk away from the extremely attractive interest rates that they secured over the past several years.
The homebuilding industry continues to be challenged by municipal and utility delays supply chain issues and trade shortages. So these pressures are slowly getting better.
On a quarter over quarter basis in Q3, our construction cycle times shortened following the trend we saw in the second quarter. We are also seeing improvements with our direct costs, which declined in the mid single digit range on a quarter over quarter basis in Q3.
The majority of these lower costs in the quarter were from lumber and trusses, but we have started to see improvements in other categories more recently.
In fact on a month over month basis in September virtually every cost category showed a decline at a consolidated level.
Looking forward, we would expect these trends to continue as a supply chain increasingly feels the effects of the slowing in housing starts.
Compared to costs for construction materials and labor land prices can take longer to adjust.
Months ago, the land market was still more of a seller's market. However, with both the public and private builders pulling back on their land spend this is now starting to change.
We ended the quarter with approximately 63000 owned and controlled lots with roughly 55% owned and 45% controlled and a total lot pipeline down from the second quarter 2022 level of roughly 76000 lots.
Our own lots have remained relatively steady since the end of last year and provide approximately three years of deliveries.
This is consistent with past annual years.
Since we have a disciplined approach toward land spend we continue to step away from deals that no longer meet our stringent investment standards.
These deals were generally lots that we put under control more recently and also higher in price.
Given our land strategy, we were able to walk away from these deals and only incur minimal costs of approximately $4 million, while meaningfully reducing our acquisition commitments and total potential land spend.
Century's total community count at quarter end stood at 217 up from 213 in the previous quarter and 186 in the year ago period.
Our set on our second quarter earnings call. We stated that we would be mindful of local market conditions and delayed community openings if appropriate.
Given the weakness in the market. This quarter, we did just that and deliberately slowed the opening of new communities.
We will continue this prudent practice during the fourth quarter such that we expect to have fewer open communities at year end than our previous guidance of 240 to 250 communities.
We are pleased with our performance this quarter and remain confident we are well positioned to continue generating strong financial and operating results into the future.
I'll now turn the call over to Dave to discuss our financial results in more detail.
Thank you Rob during the third quarter of 2022, net income increased 27% year over year to $144 $5 million from $114 million, while earnings per diluted share of $4 44.
<unk> increased 34% from $3 31 in the year ago period pre.
Pre tax income was $172 $1 million a year over year increase of 18%.
Home sales revenues for the third quarter grew to $1 1 billion, a 22% increase compared to year ago levels.
This improvement in revenues was driven by an 8% year over year increase in our average sales price to $425000 and home deliveries of 2000, and 630 of 13% year over year increase.
In the third quarter net new contracts across our footprint or 1318.
As Dale previously mentioned this decline was primarily due to the impact of the sharp increase in interest rates had on potential homebuyers.
Versus the prior year, our quarter end backlog decreased 29% to 3000, and 455 homes valued at $1 $4 billion, while the average prices of our homes in backlog increased by 1% year over year.
In the third quarter adjusted homebuilding gross margin percentage was 26% compared to 27, 2% in the prior year quarter.
Homebuilding gross margin was 24, 8% compared to 25, 7% for the same period last year.
SG&A as a percent of home sales revenue was nine 9% in the third quarter compared to nine 8% in the prior year.
Pre tax income margin was 15% consisting consistent with the prior year quarter.
Given the slowdown in home sales, we have taken steps to adjust our staffing levels in order to reduce our fixed cost specifically at the beginning of October we reduced our staff by approximately 12% and expect to incur about $2 million of severance related costs.
We incurred close to $6 million of other expense this quarter approximately $5 million was from the write off of deposits feasibility expenses and losses on the disposition of assets with the remainder primarily from consulting expenses related to the federal 45 L tax credits.
During the third quarter financial services generated $23 3 million in revenues compared to $29 1 million in the prior year quarter.
The business captured 66% of the closings and contributed $9 $3 million of pretax income compared to $11 4 million in the prior year quarter.
The decrease in pretax income compared to the prior year period was primarily due to fewer loan originations compared to the prior year.
And selling loans into the secondary markets at normalized margins this year versus 2021.
In the third quarter, our tax rate was 16% compared to 21, 8% last year.
The decrease was driven by the extension of the Federal 45 L tax credit for building new energy efficient homes under the inflation reduction Act of 2022, which was enacted in August .
During the quarter, we maintained our quarterly cash dividend of <unk> 20 per share and invested $22 $3 million and repurchasing 500825 shares of common stock at an average price of $44 58 per share, leaving approximately one 5 million shares avail.
Well for repurchase under our current authorization.
As a reminder, in the first half of this year, we invested $98 3 million and repurchasing one 8 million shares of our common stock.
Combined these share repurchases have reduced our share count by approximately 7%.
Our homebuilding debt to capital ratio was 36, 3% at quarter end compared to 37, 1% as of the end of the second quarter of 2022.
Our net homebuilding debt to net capital ratio was 32, 5% compared to our second quarter 'twenty two levels of 33, 6%.
We would expect our net homebuilding debt ratio to decrease over the next several quarters as we continue to limit spending on land acquisitions match, our starts with our sales and reduce our whip inventories as we deliver homes already under construction.
We ended the quarter with a strong financial position, including $2 1 billion in stockholders equity a 17% year over year increase and $817 billion in total liquidity.
Our return on equity also remained near the top of the industry at 33, 2%, which was above the 35% we generated in the year ago quarter and represented our fifth consecutive quarter with a return on equity in excess of 30%.
Given the continued industry wide slowdown in current activity, we are reducing our full year home delivery guidance to 10000 to 10500 homes and home sales revenues to a four 2% to $4 4 billion.
We ended the quarter with a strong balance sheet and ample liquidity, which positions us well to continue to navigate this current market cycle.
With that I'll open up the line for questions operator.
We will now begin the question and answer session.
To ask a question you May Press Star then one on your Touchtone phone.
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If at any time. Your question has been addressed and you would like to withdraw your question. Please press Star then two.
At this time, we will pause momentarily to assemble our roster.
The first question today comes from Mike.
With Jpmorgan. Please go ahead.
Hi, Good afternoon, guys, Doug Wardlaw on for Mike.
Wanted to get a little bit more insight into your process for impairments and what you guys have seen throughout this past quarter.
And any what do you guys need to see that maybe put a community on your watch list.
Start preparing for the potential of Japan.
Hey, this is Dave.
We review all of our communities every quarter.
In terms of trying to create a watch list and it's a wide range of assumptions that go into it we're looking at what our current backlog margins are what our forecasted future margins are going to be on sales that we would expect to be occurring we look at the entire life lifecycle of the asset to make sure that we're still generating a profit.
Out of it.
We started seeing some of those assumptions.
Close to zero or breakeven point, then we put it on the watch list right now as of the third quarter. We obviously, we did not record any impairments.
Right now we feel good about the state of where our properties are where our communities are what we have in them as a basis and we'll continue to review our quarterly as the current economy.
Continues to change.
Great and I know you touched on that a little bit earlier.
Just in terms of different strategies with incentives from community to community. What are you seeing there and moving forward.
Hum.
You are going to adopt adapt as the environment changes.
Where do you see incentives moving.
For the rest of the year and maybe moving into 2023.
Well as we said in our prepared remarks, our focus is on selling our complete and completing homes as they.
Moving through the construction cycle generally the closer to completion.
The home is the larger incentive that will be on that house to encourage.
Those homes to sell first.
When we look at.
The incentives price concessions, we're currently seeing.
Obviously differs a bit by subdivision and by market, but.
Overall, they're averaging between five and 10% on current sales.
Great. Thank you very helpful.
The next question comes from Jay Mccanless with Wedbush Securities. Please go ahead.
Hey, good afternoon, everyone.
I guess my first question.
Where you were talking about not really wanting to cut pricing and some of the older communities. I guess, what was the reason for not being a little more aggressive there to try and drive some more cash flow.
Well no it's really what we're saying is we're not adjusting base prices.
As a home gets gets near completion, where we're certainly going to sell that house, but what we're trying to avoid doing is adjusting base prices in a community that creates a variety of challenges.
So, particularly on the community side, where we have options in the house will we will discount the price of that house, but we're trying to avoid repricing the base price in the community for each home.
Okay. When do you think that contributed to orders being down as much as they were in the quarter. Just because you didn't want to have to go in and not only change the base price, but presumably have to go in and reprice some of the backlog.
No I mean in certain cases, we had to go into our backlog and we had to.
Adjust either incentives or or what the price was to be consistent with with where our current sales were but one of the big limitations we had on.
Our sales this quarter is just what we had completing as we as we look into Q4.
We expect to have more homes completing in Q4 than we had in Q3.
And with that as they.
Remain unsold then we will discount those houses to a point, where we can have them sold and closed.
Yeah and that was actually my next question any color you can give us around October traffic trends cancellations et cetera.
As we said in our prepared remarks, we really saw the improvement.
Our sales pace and actually last weekend was.
The best we've had in over six months and that's really driven by again the homes that we have available for.
That are near term completions and with that we are prepared to discount those more on really whatever is necessary to move those homes.
But in terms of in terms of traffic traffic is certainly down from what we would normally expect to see.
But that.
Theres still buyers out in the market.
Because of the circumstances, everybody wants to make sure that they're getting the best deal that they can.
When we look at our cancellations on an absolute number or cancellations are down in October .
And so part of it so that's for the last four months, that's right each month and as part of that we on a consistent basis, we're going through our backlog.
If we have homebuyers that because of the changing rates or they're changing circumstances.
We don't think that they are in a position to be able to close on the home then we will certainly we'd those out so we can put the homes back on the market.
And so that's driven a certain amount of our cancellations as well as making sure that what we have in backlog is as clean as it can possibly be.
And then sorry, one other question what percentage of the current backlog at the end of third quarter did you have some type of either financing incentive or rate lock.
Yeah, Hey, Jay I would say that in terms of rate locks.
We've seen it work in the past couple of quarters and is trending the same way is that we.
We have a higher percentage of your AUM in that 70% to 80% range of the first month is rate locked and then as we proceed throughout the quarter that rate lock continues to progress up and so we won't really see.
The second and third months being November December get rate locked until we get into October and November .
Okay, great I'll jump back in thanks.
Sure.
As a reminder, if you have a question. Please press star one to enter the question queue.
The next question comes from Alan Ratner with Zelman and Associates. Please go ahead.
Hey, guys. Good afternoon, thanks for taking my questions here.
First I'd love to drill in a little bit more on your comments on the sales pace because frankly, it's just a little bit surprising to hear the sequential improvement through the quarter because that seems to be counter to what I think a lot of other builders are talking about and at the same time, if I think back to your comments in July at the time you expected orders for.
Third quarter to be pretty consistent with the second quarter. So.
It obviously came in well below that so I'm trying to square that with the fact that your order pace improved through the quarter, what what resulted in the orders falling so much below what you expected them to be back in July was it.
You didn't have the inventory completed that you anticipated or was it.
More cancellations I am just trying to figure out the disconnect there between the improvement versus the loose guidance you gave back in July .
I think it's a combination of all of those things Alan certainly our cancellation rate was.
Was much higher than we had anticipated.
The interest rates, we're continuing to spike more than we had anticipated more quickly.
And as the quarter progressed.
We were completing more and more homes and we got more aggressive with regard to incentives.
To put homes under contract and so it's really a function of that as we've said as homes get near completion, we're we're going to get more aggressive on the incentive if it hasnt sold.
And as we had more homes completing we got more aggressive.
Okay I appreciate that thanks for the additional commentary there.
Second I want to make sure I'm interpreting your comments you made earlier about gross margin correctly. I think you made a comment that kind of in the near term you would actually expect an overcorrection of gross margin.
I'm guessing that that.
Is relative to kind of what we and others in the industry consider a normal gross margin to be something kind of in the low 20. So does that mean in the near term margins actually will kind of overshoot got to the downside and then you ultimately think you'll settle out somewhere in that low 20 range in the back half of next year or am I kind of just misreading that comment.
No I think Thats correct I think that you know.
Now what we're seeing is as Bill just mentioned.
Incentives on Q3 sales being in that.
5% to 10% range as we're looking into Q4 with homes that are closing.
You may end up overshooting that low 20% range for a couple of quarters, just as we and the rest of the industry worked through.
The backlog that we have or is it really just the backlog of construction that we have completed and then we start to hit a more normalized margin.
In the back half of next year with the new homes that were starting now that have better pricing and have a better cost structure associated with them.
Okay. That's helpful. Dave and then if I could just squeeze in one more here.
Your lot count is has trimmed back quite a bit from <unk> from the option Walkaways the head count reduction of 12%.
I'm guessing you know a few quarters ago. When you were anticipating community count to rise next year I'm guessing that that's probably off the table at this point, but.
Can you just talk a little bit about the.
The new cost structure, how we should think about the overhead reduction and the impact that that might have on SG&A as well as the ability to ramp community count if demand does stabilize.
Yes, so I think thinking about the two things here community count and <unk>.
Staffing on the staffing side, we did make the reductions in early October there there'll be a minimal impact that comes through in Q4, and you really see more of the benefit of that next year, but as I look at SG&A.
In the third quarter, we had about 64% of our costs were fixed we're looking to take some additional cost out of that number.
Our SG&A on an absolute dollar basis was the lowest it's been in four quarters on a fixed basis, obviously, obviously being offset by some higher commissions rolling through on closings.
And we expect that we'll be able to make some improvements as we go into 2023 on that cost structure as we look at new community count a lot of the communities that we're looking at opening that we have the possibility to open and continue some growth we already have on our balance sheet as we said.
Starting two quarters ago, we've begun deliberately not opening communities and those are community that we have on our books and so whether or not we have growth next year, we'll wait and see how the market plays out how interest rates are what demand is like but we think there is still the possibility that if the.
Homebuyers return mortgage rates stabilize we.
We could have the possibility to open new communities for people.
Yes.
I appreciate the color there. Thanks, a lot guys happy new year happy holidays, and new year, if we don't speak before.
Thank you.
The next question comes from Alex Barron with housing Research Center. Please go ahead.
Yes, hi, guys.
Thanks for taking my question.
I wanted to just.
Focus a little bit around the comment about.
Discounting the houses.
I guess trying to find the market clearing price I'm, just trying to get a sense of.
How are you.
How willing I guess you are to do that in other words.
If there's a big disconnect between where you were with price and where.
What the rest of the competition is doing or how are you guys thinking about that.
Okay.
Well it really comes down to regardless of the market whether the market is.
As strong or not as strong it comes down to the individual subdivision level.
And so when we look at it. It's there is a lot of factors that go in as you mentioned competition is one.
Another one is.
How many homes that we have in the subdivision in what the what the timing of their completions are where we sit with our backlog and if we have a lot of backlog then we're going to be more hesitant to do anything on new sales that would impact our backlog, our appraisals and that commute.
So it's really it is truly down to a case by case basis as we make those decisions but.
In General I think our philosophy is that if any.
<unk>.
If a home is completing than we'd like it off our books.
And we're going to look at each individual situation and do what makes the most sense in that particular home in that particular community.
Okay, great. Thanks, and then.
I think in the last.
Since the supply chain issue started.
I think a lot of builders kind of shifted more in the direction of starting facts and does it make sense at the time too.
Logging costs and so forth now that the market has slowed.
Just curious if your thought process has shifted on the one hand, some builders say.
That having.
That can close in 30 to 90 days is attractive to buyers because they can lock in interest rates.
On the other hand I guess.
If you have too many.
Competitors as well.
Forces like this.
This accounting mechanism.
It happened so I'm just curious how you guys are thinking about spec starts and inventory and managing that.
Yes, so we have pulled back on our starts I think probably two quarters ago, and I know definitely last quarter on our calls we had mentioned that we'd begun matching.
Our starts with our sales and so as our sales are.
It has come down in the last couple of quarters, we've really pulled back on the starts and so you can see that over the next couple of quarters as we deliver the homes that we have under construction and the homes that we have in our backlog youre going to see our inventories come down pretty significantly so I think that what we're starting now.
We are looking far enough ahead that we're trying to prevent the problem with getting into a position where we've got a community with too many specs that theres not going to be able to meet demand.
Okay, guys, Thanks, and best of luck.
Alright, Thanks al Thank you.
The next question comes from Alex <unk> with B Riley. Please go ahead.
Thank you can you talk a bit about geographic demand trends and then overlay that conversation with changes in your land inventory.
Well in general I think that we saw softness across our markets but.
We certainly saw more softness in the in the higher priced areas, which for US are the worst in the mountain region.
So when we look at.
More in Texas, and the southeast we saw less pressure in those areas than we did in the west and mountain.
Regarding the land, we're taking the approach where we're looking at everything and Thats why we have the model of having controlled lots.
And we've dropped.
Roughly.
Over 20000 lots in the last six months for a minimal cost, which really speaks to our structure and strategy on land that we can move quickly if things have changed and so it's really across the board. It's not just any one market Alex but it's across the board where we're looking at.
Land and.
Changes in that.
And then Dave as it relates to.
Darts.
In the fourth quarter, there was comment that starts in the fourth quarter will be greater than the third quarter.
Is my math correct that your gross new orders were around let's call. It 2000, and therefore your starts in the third quarter would've been around 2000, and so youre, suggesting that.
Starts in fourth quarter could be greater than 2000.
All right.
I think a couple of things couple of wires that cross I think what youre referencing in terms of what we're going to have more of in Q4 would be completions and then.
What youre talking about in terms of your gross sales, yes, it's right. It's about 2000 and so as we match on a community level. It may be around that number excuse me, but we may also trim. It back because we don't want too many specs in any one community and so while somebody may be having.
Maybe getting additionally, aggressive on sales in clearing out some inventory we won't let them start out a one for one basis, there may be some others, where we're getting into closeout and we may start a couple of extra but your rough numbers are correct.
Yeah.
Thank you.
The next question is a follow up from Jay Mccanless with Wedbush Securities. Please go ahead.
Hey, Thanks for taking my follow up I guess, what type of demand are you guys seeing from the institutional whether it's single family for rent or build for rent community.
So we're seeing.
Somewhat of a pause right now from that community, just kind of seeing where the market settles out where a lot of them have already raised capital, but they are just sitting on it before they deploy it to kind of see where prices shake out there are still transactions getting done, but it's certainly not as robust as it was 90 days.
Ago.
Okay.
And then I guess is there.
If you are having to discount 5% to 10% or 5% to 10% on incentives for new.
New contracts at some point does it make sense to start maybe bulk selling some neighborhoods or looking at larger deals to these ssrs or would the the.
That you'd have to take to make those transactions would be bigger than what you already given to the consumer buyer.
Of course, we'd look at those type of opportunities and it just depends on a case by case basis, you know what the asset pool is of the homes the appetite of the buyer and all that but of course, we would look at those type of things.
Okay.
Okay. Thanks for taking my follow up appreciate it.
Okay.
This concludes the question and answer session I would like to turn the conference back over to Dale for any closing remarks.
Thank you operator, I'd like to take this opportunity to once again, thank all of our team members for their incredible work and continued dedication to our valued homebuyers.
I'd also like to thank our investors for their time today. We appreciate your continued support and investment and look forward to speaking to you again next quarter.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Okay.
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