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Standard Pacific Reports New Home Orders Down 13%
Standard Pacific Corp. reported at the end of last month that its new home orders companywide were down 13% in January and February from the level of a year earlier. The company based in Irvine, Calif. noted that the decline resulted from “a slowing of demand in some of our markets from the unsustainable pace of the past few years.”
Standard Pacific noted that the downward trend started in the fourth quarter of last year and “is particularly evident in markets which have experienced significant price increases and investor-driven demand in recent years, such as California and Florida.
Among the company’s new home orders in various markets:
- Southern California was down 24% from a year earlier, largely because of a softening of demand in San Diego and, to a lesser degree, in Orange County; reduced product availability in its Los Angeles division; and an increase in the cancellation rate. “New orders were up, however, year over year in the Inland Empire, our largest and most affordable division in the region.”
- Orders were down 60% in Northern California, with the number of active selling communities down, especially in the South Bay division, where projects rapidly sold out in 2004 and 2005. A number of new projects are targeted for that division this year. Although orders slowed noticeably in Sacramento during the second half of last year, they were up slightly in January and February from a year earlier.
- Florida was down 37% because of reduced product availability in certain divisions, particularly Orlando and Jacksonville; softening buyer demand in the state’s south and southwest markets; company efforts to bring production and sales into better alignment in Tampa; and a modest increase in the cancellation rate.
- Arizona was up 11%, with an 86% increase in the company’s community count. “The Phoenix market has moderated somewhat from the unsustainable pace of the last few years. However, the company believes that absorption levels for new homes are healthy with a generally normal level of cancellations.”
Standard Pacific reported that its cancellation rate for the year-to-date period ending on Feb. 26 was 26%, up from 18% for the year-earlier period.
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