Entry-level builder LGI Homes announced that it closed 320 homes in August, which was a 74.9% increase over the 183 homes it closed in August 2014. At the end of the month. LGI has had 49 active selling communities.
The jump in closing isn’t a surprise. In the last year, the company has moved into Charlotte. But the company had to fight some headwinds in its core markets.
“Our performance has not been impacted negatively by the weak oil and gas sector in the Texas and Houston economies or the weather during the May and June,” CEO Eric Lipar said on the company’s recent earnings call. “In fact, July absorption in Houston was very strong, averaging nine closings per community with 72 closings spread throughout our eight active communities.
And the next year should bring even more closings as the builder enters new markets, such as Seattle.
“Seattle is underway,” said Lipar. “We plan to close the acquisition of our first project in August and start construction in the fourth quarter. We have been working on our first acquisition in the Nashville market and plan on acquiring our first project before the end of the year. Our first project in Jacksonville is now closed and construction of our sales office has begun. We plan on opening sales by the end of the year and moving our first customers into their new homes in the first quarter of 2016.”
LGI also has designs on Colorado Springs and Raleigh, N.C. Lipar plans to take his existing model into each of these areas.
“Because we are a systems-based company and have processes in place, we believe our expansions into these new markets are well-positioned for success,” he says. “Our goal is to simply duplicate what we have accomplished thus far in our current markets. Our expectation is that each of these markets will perform at a high level and produce results consistent with our existing community.”
LGI also increased its guidance for 2015–going from a range of 2,800 to 3,200 homes closed to a range of 3,000 to 3,300 homes. “… the reason we increased our guidance is sales, demand, everything has been very strong and we see that continuing through the end of the year,” Lipar said.
