When I look at our buyers, these – there are a good number of first-time buyers but they’re patient first-time buyers. They’ve waited to buy the home that they wanted, that was the size they wanted, had the features that they wanted as their first home. We have an awful lot of age targeted, age qualified and otherwise empty nester buyers. I happen to love those buyers because that’s a sophisticated buyer. They know a great home, right? They know that some of the things that we’re doing, other people aren’t doing, and they appreciate that. So I think I would think about the macro environment more affecting the spec to be built mix than the buyer profile. Our buyer profile is pretty well described by our locations and our product.
Julio Romero: Got it. That’s very helpful there. And then last quarter, you spoke about having some discretion for growth and the ability to slow things up if rates headed north again. It sounds like the possibility of you guys doing that is lower now versus maybe three months ago, not[ph] that’s fair at all.
Allan Merrill: Yes. Look, I think we have optionality. There’s an awful lot of what we can do or planning to do that if market conditions change. I use the analogy, and it’s probably not a great one of a meteor strike. Like, if there’s a meteor strike, we’re going to adjust behavior, and that would relate to growth as well. But it is clearly the case that if you just think where we were in mid-November, rates had just started to roll off that 8%, and if things stayed right at that level, we might have eased up a bit. But what we saw instead was rates settled down, demand was strong. I was glad that we hadn’t made any significant shifts in our growth strategy, and we remain well positioned for that 200-plus community count a couple of years from now with just steady double-digit growth.
But I don’t want anyone to think we’re so hell-bent for weather on that growth trajectory that if conditions changed in a way that we wouldn’t reconsider, obviously we would. We’re stewards of capital, and if we needed to hoard some cash or change the trajectory of growth, we would. But I think we’ve weathered some fairly significant interest rate movements in the wrong direction, not counting on them moving in the right direction. But in this environment, I feel pretty good about the growth trajectory that we’re on.
Julio Romero: Appreciate the color. I’ll pass it on. Thanks again.
David Goldberg: Thanks, Julio.
Allan Merrill: Yes, thanks, Julio.
Operator: Thank you. Next we will hear from Alex Rygiel with B. Riley. You may proceed.
Alex Rygiel: Thank you very much, and nice quarter, gentlemen. Heading into the December quarter, you thought there could be some potential for competitors heavily discounting, and you didn’t really kind of want to get into that. Can you talk to us a little bit about how that fourth quarter kind of ended up playing out for you?
Allan Merrill: Yes, I mean, look, there are a number of builders whose fiscal year ends are not in September, when ours is, that are after that. And I mean, as long as I’ve been in this business, there has tended to be some pressure to hit volume numbers, both sales and closing in those companies. And there’s nothing wrong with that. I’m not being critical of that. It’s kind of part of our industry seasonality. And we anticipated that that would be the case. And it was the case. November and December, there were a lot of opportunities for folks that wanted quick move-in homes to take advantage of some pretty good discounts. We are not a spec-first builder, as you know. And so in a number of places, we weren’t positioned to really compete.
That was a contest we weren’t entered in. So it kind of played out the way we expected. The thing we always talk to our team about is if we’re in an environment, a time or an interest rate environment, or a combination of things, where there is in a submarket a big demand for a spec, and we don’t have a spec, and we’re not going to have a spec that’s a 30 day or a 45 day close for that buyer. We’ve got to be really disciplined about not trying to create an inducement for a to be built that’s six months or seven months out that really structurally revalues our community, right? You can’t meet that particular need, and that’s okay. It turns out there are a lot of buyers out there. They don’t all have to be ours. And I think that’s a – that’s just a – it’s a judgment call.
It’s an intelligence that we have to have in the business. There are other times where the buyer is a little less certain to be built or a spec, and their timing issues may not be as acute. We want to compete for that buyer. But if they’re going to have a design center experience, they’re going to get to have the benefit of our mortgage choice experience, and if they’re buying a zero energy home, I’m not encouraging, and we’re not often going to find ourselves competing on price for that buyer, given the other things that we do. So when the whole market gets very incentivized and very spec-oriented, we got to be a little careful. And I think that is – that was true this year. I think that will be true in the October-November time period in future years.
Alex Rygiel: Good answer. And then can you identify some of the strongest and weakest markets and maybe provide some color around why this may be and how it could change.
