Joe Ahlersmeyer: Hey, thanks a lot everybody for the question. I’ll actually just dispatch my questions into one here given the time. The first one on the percentage of your land that you own and put under control before land inflation. Can you just speak to maybe the development cost inflation that may have come in after that or will continue to come in after inflation too cold in that part of the process? And then two, if you could just maybe provide a little additional detail on this California tax credits surprise?
Jeffrey Mezger: Rob, you want to talk to the development costs. And then Jeff will talk about tax.
Robert McGibney: Sure, yes. On the development cost, the vintage of our lots, we’ve got the majority of our lots going back to Warner before. So our land basis is solid. We have seen development costs increase and there has been a lot of work, whether it’s new-home communities being built or the government work that’s going on spreading that trade-based pretty. And so there was some pretty significant increases, inflation, and the development cost. We think that that’s settled down now but it’s kind of settled at a higher baseline. Although we combine where we are, our current development costs on those communities plus our land basis. We’re in really good shape for our portfolio of communities and how it all balances out.
Jeff Kaminski: Okay, yes, in relation to the tax credits, the energy credit, it was pretty specific it was on the homes that have been built in California really affected the 2023 energy credit relating to those homes. It came from a little bit of clarification from the IRS in early fourth quarter were they talked about, where they actually changed the standard for ENERGY star specific to California to a higher standard than we see in other states. So we are assuming the national standard for all of our operations including our California operations. But once this new guidance came out we had to make the adjustments to the rate or to the energy credits, which take the rate up. I think it was actually rounded up percent but it was less than 1% impact on the tax rate for the year.
Operator: Thank you. And our final question will come from the line from Jade Rahmani with KBW. Please proceed with your question.
Jade Rahmani: Thank you very much. Could you provide any regional commentary on how demand is holding up specifically on California as possible? Also, Phoenix and the Sunbelt markets. Thanks.
Jeffrey Mezger: Rob, you want to take.
Robert McGibney: Sure, yes. Since then we’ve seen rates come down really the pickup in demand has been pretty widespread across our portfolio. The West California has remained strong really they’ve done really well, don’t have anybody that’s a big concern as far as sales pace or demand out of the West Coast to California. Really across the whole portfolio, Texas, Florida, the demand pickup that we’ve seen since rates started coming down is really influence sales and a positive direction. So, no real outliers to speak of there and optimistic about sales here as we progress throughout Q1.
Jade Rahmani: Thank you. And as a follow-up, the Sunbelt market has really high multifamily supply right now. Any concerns about competition? With that. Are going into the spring selling season.
Jeffrey Mezger: Yes, let me take that, Jeff.
Jeff Kaminski: Yes, yes go. Yes. I mean, as far as you know, there are a lot of multifamily completions coming online. We’re seeing the starts of those multi-family units come down, I mean they are a competitor to some extent and we’re primarily focused on the resale, That’s always our biggest competitor. Resales have been down somewhat, it’s created an opportunity for us for new homes, especially on our personalized homes and we have to stay connected to what’s going on with rents because that’s an alternative, but we don’t really see that as our primary competitor. We think people say they want the American dream. They want to own a home and we’re trying to make those homes at affordable as we can for them to get them into a new one.
Operator: And ladies and gentlemen, this concludes today’s teleconference. Thank you for your participation. You may now disconnect your lines.
