Matthew Bouley: Got it. Thank you for that. And then secondly, you mentioned at the top, some eventual opportunities to sort of put your liquidity to work if credit constraints with smaller builders amount. I guess I am curious how that might take shape from your perspective, kind of what are you seeing and hearing on the ground today from a competitive perspective versus these smaller builders?
Ryan Marshall: Yes. Nothing necessarily on the ground yet, Matt. I think we are more being responsive to some of the things that have been widely written about and talked about that the smaller banks that provide operating lines and project-specific financing, that credit has gotten tighter. We are not in a position where we use project-specific financing. We are self-funded for almost everything that we do, and we have the ability to given our size to tap into the public capital markets, if so needed. So, I think when it comes to land development, land acquisition, the desire or the decision to put more spec into the ground, we have got tremendous flexibility because of the way that we are capitalized. And I do think that could potentially give us the opportunity to take advantage of any kind of dislocation that might appear.
It’s an always-on mindset, which we have always had, not trying to send any kind of a message there other than there was a banking crisis, credit has gotten tighter, and we have got our ears open to any opportunities that that might create for us.
Matthew Bouley: Got it. Thanks Ryan. Good luck guys.
Operator: And we will move next to Mike Dahl at RBC Capital Markets.
Mike Dahl: Good morning. Thanks for taking my questions. Just a follow-up on the land dynamics and market dynamics, you did raise your land spend on the top end is up quite a bit versus last quarter. So, I wanted to just ask, is that incorporating any potential flex in acquisition spend and as you look to take advantage of potential disruptions later this year, or is that more of kind of a core something changed, either more deals kind of penciling that you thought you would walk away from or something else going on with either development or acq spend that you care to highlight in terms of that increase in the forecast spend?
Pablo Shaughnessy: Yes. Fair question. That is just our projection of what we see on the ground. And so the increase in absorptions that we have seen, the relative stability in pricing gives us a little bit more confidence as we are looking at some of the deal flow that we – for land transactions, it does not anticipate or incorporate any M&A or anything of that sort that would happen separate from that, and we would evaluate it. But we haven’t projected that in the overall increase.
Mike Dahl: Got it. Okay. Thanks Bob. And then my follow-up, you called out the order trends by buyer segment, which was pretty interesting. Could you help us understand maybe the community count or absorption by our segment first time move up active adult? I think you said that the total was maybe up 18% in first time, but then down in the 20s on the other two segments.
Pablo Shaughnessy: We haven’t given that level of detail in a while. I think from a community count perspective, you have heard us say, we are investing in the entry level. So, our – a lot of the growth that you saw, we had growth across all three buyer segments in our community count. It was more oriented towards the first time. And interestingly, then next to the move-up and the active adult is those are bigger positions, so they don’t – we don’t have quite as much flexibility in those over time. But the 13% was spread across all, but it was largely in the first time.
Mike Dahl: Okay. Got it. Thank you.
Ryan Marshall: Thanks Mike.
Operator: We will move next to Susan Maklari at Goldman Sachs.
Susan Maklari: Thank you. Good morning everyone. First question is talking a bit about the SG&A. You mentioned that you are cautiously adding some headcount there. Can you just give some sense of how that’s trending? And where do you expect that, that can go over time as you think about the level of deliveries you are targeting?
Ryan Marshall: Yes. Susan, I think Bob highlighted in his prepared remarks, just with the increased potential for production in the year. We have raised our production potential by 2,000 to 3,000. So, we have added sales and construction headcount in the right locations that matches up where we have been able to kind of turn up the volume there just a little bit. We will – I think Bob highlighted, we will continue to maintain SG&A leverage as a percentage of revenue, so no hidden message there, nor should there be an expectation that you would see dilution to our leverage rates.
Susan Maklari: Okay. And you increased the authorization on the buybacks this quarter as well. Can you talk a bit about your appetite to buyback the stock here? And any thoughts on how you are thinking of the cadence of that going forward?
Ryan Marshall: Yes. We don’t provide forward guidance, Susan. But in terms of appetite, I think the increased authorization, which we are very pleased our Board made the decision to increase the authorization by $1 billion. I think it shows that we have got a continued appetite for this to be a part of our capital allocation philosophy, which has been a consistent part for going on nearly 10 years. So, if consistency is a virtue, if it’s not, we should make consistency of virtue, I think we are demonstrating that we are living up to the capital allocation philosophy that we have articulated for our shareholders.
Susan Maklari: Okay. Thank you and good luck.
Operator: We will go next to Dan Oppenheim at Credit Suisse.
Dan Oppenheim: Hi. Thanks very much. I was wondering if you can just talk about the West where you talked about some of the tougher conditions, how are you thinking about spec at higher price points and where it’s more challenging? Are you doing – do you have much less in terms of spec per community in the West than you have in other regions? I am just curious how you are handling that?
Ryan Marshall: Yes. Dan, in terms of the West, for us, it encompasses the coastal markets, California and Seattle, but also includes Las Vegas, Nevada, Colorado, New Mexico. So, there is a mix of different cities and geographies and product types in the West. When we get into the coastal markets, we build a lot of multifamily three and four-story product. And so those buildings actually generally start as spec just by the nature. So, there is spec there and there is not anything that we are necessarily concerned about. We have – I would highlight in the West, we have seen some strengthening in Las Vegas and particularly – and Phoenix over the last two months to three months, we have actually started to see those markets firm up and start to get back on to some pretty positive sales trends and positive footing.
So, the two places that we are continuing to kind of pay attention to Northern California and Seattle, those are markets that I think are pretty tech-heavy. The price points are generally higher. Affordability is more challenged. Also a couple of the areas that are probably more directly impacted by some of the regional bank crisis, so – but on the whole, we are still very optimistic about the way our West business is positioned just relative to Texas, the Southeast and Florida, those markets have done exceptionally well.
Dan Oppenheim: Sure. It makes sense. And I guess you talked about cycle times coming down. How much – if we think about the conversion, how much would you say is driven by some improvement in cycle times versus just the specs and the shorter time from contract to closing on those specs?
Ryan Marshall: Well, Dan, the way we are really looking at is, we are looking at it from start to final. And certainly, we pay attention to overall cycle time from start to close which has improved by a quicker flow-through on the spec side. But when we talk about cycle time, it’s separate and independent from anything related to a buyer. It’s purely within how long does it take us to build a home, and that’s where we are starting to see some gains being made, particularly on the front end. So, for homes that are going into the ground now we measure it from slab to kind of frame as an example, frank stage. We are starting to see some pretty meaningful gains out of that front end of construction. The back end of the homes that are finishing now, they are still – those homes are still on longer cycle times, but we would expect to extend the gains that we were recognizing currently on the front end.
As those homes get into the back end trades, we would expect to pick up time there as well.
Dan Oppenheim: Great. Yes. I was thinking about in terms of the backlog conversion from those two issues. Great. Thanks very much.
Operator: Next, we will move to Truman Patterson at Wolfe Research.
Truman Patterson: Thanks for taking my questions. First on the entry-level orders, I believe you all said were up like 18% year-over-year. That’s quite a bit stronger than where we think underlying entry-level spec demand is. Could you help us understand that a little bit? Is it easier comps, community location? Have you all early in 1Q – did you bring incentives more in line with the market, etcetera, just trying to understand that result a little bit better. And then could you help us understand just where overall absorption stood exiting the quarter in March?
Pablo Shaughnessy: I was going to say it’s hard to react to that. I think what we have seen reflected in our results is that we started fair number of homes that were speculative last year. They were available, and we have been able to sell them. We – I wouldn’t characterize it as a huge incentive. I have mentioned earlier, we have a national rate buy-down, and it is probably most appealing to that buyer group. But it probably is only a relatively small percentage of our total population of signups that actually took that. They may have other things that are more important to some buyers.
