"Beazer Homes is betting it can get a leg up on the competition by offering consumers a sustainable product that can yield thousands of dollars in savings per year. The following analysis discusses how Beazer is navigating today's difficult market dynamics and explains how the builder plans to increase margins sequentially over the coming year. Since Beazer is prioritizing a pace-over-price strategy, the builder is leaning heavily on spec homes to push inventory. About 75% of sales in the prior quarter were spec-driven."
"We are gonna play in the market that is out there, not the one that we want, CEO Allan Merrill said. We are dealing with the reality that right now, the buyer dynamic is that specs are how to drive an acceptable sales pace. Homebuilders need to rely more on spec inventory due to a shrinking backlog of orders. Reflecting this trend, Beazer's total net new orders were down 7.8% annually and decreased 19.3% per community year-over-year."
Beazer is sustaining a robust sales pace through a pace-over-price strategy that relies heavily on spec homes, reaching about 75% of sales in the prior quarter. The builder is shifting more production toward move-up homes to capture higher margins and appeal to less rate-sensitive buyers, while deemphasizing the entry-level segment as younger Americans remain priced out. Energy-efficient home offerings aim to differentiate the product and deliver substantial annual savings to homeowners. Net new orders fell 7.8% annually and 19.3% per community, reflecting a shrinking backlog that sustains higher spec inventories. Management plans sequential margin improvement as product mix and incentives evolve.
Read at www.housingwire.com
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