KB Home's chief executive officer sees a housing recovery taking hold in certain markets and feels well-positioned to capture some of the business.
"Across this country, we’re in the right markets," said Jeff Mezger, president and CEO of KB Home (KB) at the builder’s 2013 analyst conference.
Mezger addressed the crowd Tuesday, speaking to the recent growth and success of the homebuilder over the past year. Between investments, revenue generation and cost reduction, the average sales price for the company increase 24% year-over-year in the first quarter.
On top of that, 60% of deliveries were to first-time buyers, noted Mezger, who adds that today’s first-time homebuyers are bringing in more income and buying homes in better communities.
We have focused on both the long term and the short term, said Mezger, who adds the company’s stock over the last four months has been the top performer.
"We’re in the right markets today; it’s the right time," added Mezger. "We like where we’re at." Currently, the company is working in some of the strongest markets in the country: Arizona, California, Colorado, Florida, Metro D.C., Nevada, New Mexico North Carolina and Texas.
According to Mezger, 49% of KB Home’s (KBH) revenue in 2012 came from California; in the first quarter that increased to 51%. Texas is the biggest market by unit sales for the homebuilder.
Mezger noted that the builder likes its footprint and has no immediate plans to expand. "We will at some point, but it’s not necessary today," he said.
The president and CEO said the company intends to capitalize on the momentum it’s established so far moving through 2013. In fact, in the first quarter alone, the homebuilder spent more than $345 million in land and land development. However, KB Home is setting its sights on spending more than $ 1 billion throughout the year, said Mezger, who noted the growth is a significant increase from where the company is now.
So moving into the summer, Mezger said the homebuilder will continue to build off the momentum it already has the past year. "We think we can grow quickly and we think we can have quality growth," ()