M.D.C. Holdings, Inc. (NYSE:MDC) Q4 2022 Earnings Call Transcript

David Mandarich: Well, I’ll just start off, and Bob can probably enhance it a little bit. But essentially, what we’ve done is we looked at customer preferences on dirt starts, we put those kind of preferences in our inventory houses, including what I call some sunrooms or patios or cabinet types. But we think we’ve looked at the metrics, and we feel really good about what our inventory houses would look like when they’re finished.

Bob Martin: Yes, I think that’s absolutely right. We basically looked at the take rate for both structural upgrades and design center upgrades, and we’re trying to emulate that see what’s the most popular. So as a result, it really should put us in the same range of options and upgrades that we had before. It just so happens that a lot of them are now going to be preselected for many of our consumers versus them selecting them.

Jesse Lederman: Got it. So is the ASP roughly on par with your build-to-order product when all said and done or what — just lastly, what’s kind of the variance there as it can today?

Bob Martin: Yes. I wouldn’t see necessarily a huge variance in ASP just because of that. I mean right now, the metrics on spec versus dirt ASP could be a little bit skewed just depending upon where the cancellations have come to and therefore, where the spec inventory is the highest. But for now, I think the intent is not to reduce the average selling price because of the spec strategy.

Jesse Lederman: Understood. Thanks for all the color. I really appreciate it.

Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Bob Martin for any closing remarks.

Bob Martin: Thank you all for joining the call today. We look forward to hosting you again when we announce our Q1 2023 results.

Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.