Levitt Corp. Releases Earnings; Targets Active Adults in Florida Housing Market
A major home builder in the Florida housing market, Levitt Corp. just disclosed its fourth quarter earnings - they were down by half and year-end profits were four percent lower.
For the fourth quarter, the Fort Lauderdale-based company said it earned $8.3 million, or 42 cents a share, on revenue of $124.52 million. For the same period the year before, Levitt said it earned $17 million, or 85 cents a share, on revenue of $177.03 million.
Reasons behind the decline
The decline in fourth quarter revenue came, in part, because Levitt delivered 401 homes, a 41 percent decrease from the 675 homes it delivered during the same period the year before. This follows the recent patters of a decline in Florida housing starts.
However, looking forward, the 490 new orders logged during the period were 56 percent higher than the 314 new orders Levitt recorded during the fourth quarter the year before. The value of those orders more than doubled - to $165.1 million from $76.6 million.
The company said it delivered 1,789 houses during the year, down 16 percent from 2,126 the year before. However, new orders rose 5 percent (to 1,767 from 1,679) while the home value of those orders rose 28 percent - to $547 million from $427.9 million.
Reasons behind new Florida home loan/home building orders
Part of the reason the value of new orders rose faster than the number of new orders is Levitt - along with other Florida home builers - is working to focus on homes for more affluent customers, a shift from marketing to first-time buyers. The company noted 72 percent of its inventory available for sale is in communities dedicated to the active adult market.
Estimated to be fastest-growing sector in the housing industry, active adult communities focus on people about 55 years old to 75 years old. These people, close to retirement, often have money to spend on luxuries.
Levitt Chairman and Chief Executive Officer Alan B. Levan said his company is firmly committed to the active adult - or baby boomer - market and will continue to explore opportunities to introduce such products in markets beyond the Southeast.
“We believe our active adult communities position the company favorably in a rising interest rate environment, as many of our active adult customers have a higher level of liquidity and are less dependent on mortgage financing,” Levan said.
The company looks to focus its Florida home loan efforts on this segment of the population. Either way, new houses are being built and the building community is confident about the future.
