Standard Pacific Homes offered a sliver of good news Monday (Sept. 17) in advance of its presentation at the Credit Suisse investor conference: The company's sales and cancellation rates in California and Arizona improved in July and August compared to last year.
That bright spot was dimmed some by news that sales appeared to deteriorate in Florida, Texas and the Carolinas, and Florida's cancellation rates remain high.
"Despite the positive comparisons in some of our markets, our absolute sales absorption rates continue to reflect the difficult housing conditions in most of our markets which were exacerbated during the quarter by the further tightening of available mortgage credit for homebuyers," the company said in a prepared statement.
While other companies have anecdotally reported sagging sales in the California market, Standard Pacific's orders in the state were up 100% for the July and August periods versus the same two months last year. Cancellation rates were 32% compared to 57% last year.
Arizona, likewise, showed an improvement, with sales up 42% and cancellations down to 33%.
The Florida market presented the other side of the coin, with orders off 24% over last and the cancellation rate flat year-over-year at 53%. Sales were likewise down in Texas by 5% and down 13% in the Carolinas.
Because home prices are trending down, the company also said it expects to take more impairment charges during the third quarter.
The early sales report from Standard Pacific was viewed with a jaundiced eye on Wall Street. Michael Rehaut, the lead home building analyst at J.P. Morgan, wrote in a research note, "As opposed to being driven by a rebound in industry demand, which we believe has not been the case as most trends have pointed to the market further softening over the last 2-3 months, SPF reported July/August orders up 20% YOY, largely driven by a significantly easier year-ago comp of -58%, in our view, which we also note is among the industry's easiest. Moreover, given July/Aug.'s higher can rate, continued low absorption rates, and SPF's outlook for further impairment charges, we continue to believe fundamentals remain highly challenging."