Adding to the evidence that this year will offer a brisker spring sales season than the industry has seen in years, William Lyon Homes reported an explosion of sales orders in the first quarter. For the first time in nearly four years, it took orders for more than 300 homes during the three-month period.
Fresh out of a non-contentious, pre-arranged bankruptcy, the Newport Beach, Calif.–based builder reported taking 321 new home orders in the quarter, up 89% over the anemic 170 sales orders it logged in the same quarter last year. Closings, too, were up to 128 homes, an increase of 15.3%. The builder’s backlog of homes sold, but not closed, more than doubled, up 132% to 332.
The improvements stretched across Lyon’s three-state market, up 20% in Southern California over the previous year and 12% in Northern California. Order improvements were even more pronounced in its markets that were hit harder by the recession, moving up 297% in Arizona and 186% in Nevada. And the sales are sticking. The company’s cancellation rate fell to 9% from 15%.
Lyon’s sales per community increased to 16.9 for the quarter compared to 9 for the same period in 2011.
All the success exceeded company projections by nearly a third or more. And the achievement had nothing to do with discounting. The sales prices were 30% over projections, the company’s CFO Colin T. Severn said in a news release announcing the results.
“We are reducing our incentives, selectively increasing prices, and we now expect to open new communities sooner than initially expected,” said Executive Vice President Matthew R. Zaist in the statement.
William Lyon came out of bankruptcy in February, only a few short months after filing for a pre-packaged reorganization plan it had worked out ahead of filing with its lenders. The plan allowed the infusion of $206 million from a real estate investment group to restructure debt and provide capital for operations and land deals.
While the company was in bankruptcy, it closed on a 27-acre parcel of land in Palo Alto and Mountain View, Calif., called the Mayfield Mall that included the rights to build 303 homes.
Teresa Burney is a senior editor for Builder magazine.
Learn more about markets featured in this article: Los Angeles, CA.