KB Home (NYSE:KBH) earlier today posted a better than expected EPS for the first quarter of 2013 and registered its highest first-quarter average selling price since 2006.
The company revealed in its earnings report that the overall average selling price was $271,300 – $52,300 or 24 percent higher than the year-earlier quarter. The increase in the overall selling price also marks the 11th consecutive quarter of year-over-year improvement for KB Home (NYSE:KBH).
The higher average selling price for the quarter reflects the company’s ongoing strategy of repositioning its operations for serving the company’s core first-time and first move-up homebuyers. The company is transforming its operations in higher-performing choice locations in land-constrained growth markets that highlight higher household incomes and increased demand for bigger homes with more design options. The general rise in home prices also contributed to the rise in average selling prices.
The rise in average selling prices was visible against each of the four home-building regions for the company. The yearly increase was in the range of 13 percent in the Central region to 22 percent in the Southwest region.
For the quarter, KB Home (NYSE:KBH) reported an EPS of ($0.16), which beat the analysts’ estimates of ($0.22). The company reported revenue of $405.2 million again beating the estimates of $359.8 million. KB Homes delivered 1,485 homes in the quarter, which was 29 percent more than the first quarter of 2012. The gross profit margin for the housing company improved to 14.8 percent from 8.0 percent last year. Net orders for the company was up by 40 percent to 1,671 while the total value of net orders rose 83 percent to $506.8 million.
In another sign of an improving housing market, home prices for January rose by 0.6 percent, marking the 12th consecutive monthly increase, according to the Federal Housing Finance Agency’s monthly home-price index. When compared to last year, home prices were up by 6.5 percent. Despite the increase in prices, the results were below economists’ expectations, but were in line with the previous three months.
Another data from the National Association of Realtors revealed that the U.S. existing-home sales and prices increased again in February. As per the data, the sales were the highest since November 2009. The sales improved o.8 percent from January reaching an annual pace of 4.98 million units. The sales of apartments and condominium units gained a bit while the sale for single-family home fell slightly.
The average sale price increased by 1.8 percent to $173,600 but was still $3,200 below the 2012 average.