Operator
Thank you, the next question is from the line of Susan Berliner of JP Morgan. Please proceed with your question.
Susan Berliner, JP Morgan
Hi, good morning. Just wanted to… I could speak about the spec strategy with the market place, if you are contemplating changing, and, I guess, in Houston, since it is such a big relocation market, if you can, I guess, just discuss where your specs are in the Houston market and where you see that trending over the year?
Jeff Mezger, President, Chief Executive Officer and Director
Susan when you remain committed to our build to order model and we are heavily [inaudible 48:23 – 27]. We always have some inventory that’s hanging around whether it’s a cancellation after start, a multi-family community or if we [inaudible 48:37] except for three lots we made. We started those three just to clean it up. So, there is always some level of inventory in our business and as we go through the year, our inventory sales are our most difficult sales. Our sales teams, our management teams, everybody – we take the view that building a home of the customer’s choice is the way to go. There is a lot of value to that. And if it’s in Houston, you can build a home there pretty quickly; it’s one of our faster build times, we will retain the value of build to order over the risk of a spec every time. In our 4th Quarter, I shared that, we did have some margin compression on inventory sales that we had achieved in order to deliver what we did but it’s not a large component of our business, we are going to stick to our strategy of build to order.
Jeff Kaminski, Executive Vice President and Chief Financial Officer
Regarding your question on specs, Susan, we are maintaining right now our two [inaudible 49:39] per community across the business. I don’t think the Houston division varies significantly from that. I don’t have the information in front of me but I think we are on the same matrix.
Susan Berliner, JP Morgan
Great. And I just had a follow up, I guess, on the Inland Empire. I guess, what was the change? Was it the Chinese buyer? Was there anything else you could discern from the slow down there?
Jeff Mezger, President, Chief Executive Officer and Director
There is a ripple that occurs when Orange County softens a little, and it did, and I do think it was in part the Chinese buyer’s demand that softened. It ripples Inland, and the further Inland you go, the more the ripple is felt. There are some areas in the far eastern end, I’ll say, of the Inland Empire, not the Palm Springs, but say, 60, 70 miles from the coast, where the price pressure between new and used was on the magnitude of 8% or 10% in the last six months, where prices went down that much. So, it did pretty hard out there. It’s not where you have a big business. It’s not where you are investing today. Because you have communities opened that you are working through, it had an impact. It’s the typical urban flow. As Orange County settles, it will slowly settle back Inland. I don’t know that it’s a fundamental structural [inaudible 51:00], it’s just a short term market dynamics that we are facing.
Jeff Kaminski, Executive Vice President and Chief Financial Officer
Coming back to your question, we did just check the number; we are actually a little bit below. The company average in Houston, company average being two per community; we are below that in the Houston market which [inaudible 51:14].
