Will Wong: Hi, guys. Good morning. Will Wong on for Mike. So you mentioned earlier that you guys feel you have healthy momentum that continued into January and February as well with January having the most online reservations since 2021. Obviously that gives some foresight into a strong spring selling season. But I was wondering if you could give a little bit of more color on your expectations relative to spring selling season, historical norm and whether the size you see now make you feel like it could be stronger than usual of your outpace or something that’s sort of in line?
Sheryl Palmer: Yeah. As I said we really have had a nice start to the year. December being a company, record January continuing strong right out the gate. And I think we’ve seen that traction continue through February. It was interesting to me a couple of weeks ago when we saw that real spike in rates that we came out of that with probably the strongest weekend we had seen in a long, long time. Hard to look forward, but I would say all indicators that we’ve seen and as you mentioned when we look at traffic when I look at web traffic when I look at the number of reservations, I think January might only be beat by February when I look at the number of reservations in the first two weeks of the month. All indicators are really strong.
And I think what’s happened is we’ve moved to a place where the volatility in interest rates, the builders have the tools in their toolbox to really be able to help the consumer. And there are not a lot of inventory in the resale market. There’s not a lot of inventory in the new home market. And I think I don’t want to say the fear of missing out I think that might be a — I’m not trying to suggest we’re going back to 21 days. But I think we’re in a healthy stabilized market and the consumer has met us more than halfway in understanding that interest rates in the 5s and 6s are really, from a long-term perspective a very good thing and they’re out and so forth. I think the other thing, the last thing that I mention is, when I look at kind of the number of renters that we have in the US today and I look at every 50 bps of reduction in interest rate and what that does to open up the opportunity for renters to enjoy homeownership, I think they’re sitting on the sidelines.
So lots of I think, sprinkles of good news that we’re seeing and everything that we see today would lead us to believe it’s going to be a really nice healthy spring selling season.
Will Wong: Great. And then if you guys can just touch on, is there any substantial differences in markets between the use of any type of incentive throughout the past quarter?
Sheryl Palmer: Yes, it’s an interesting point. There really is. Generally, I would say that — as I’ve said a couple of times that our incentives are mostly used, consistently used with our first-time buyers. But when I look at markets like — port like Seattle, I would say that’s a market that very rarely uses kind of forward commitments. I would say the same for Sacramento. I would say generally, when I look at the rest of our business with the first-timer, I would say there’s an equal spread of using kind of those finance tools to help folks to the front door. And then obviously, when I look at our resort lifestyle business, which is certainly moving across the US, but predominantly today in Florida, we still see a very high penetration of cash. And so we’re not using nearly the same incentives for that consumer that we would be using for our first-time in our first-time move-up.
Will Wong: Got it. Thank you, guys.
Sheryl Palmer: Thank you.
Operator: Thank you. The next question comes from Kenneth Zener from Seaport Research Partners. Please go ahead, Ken.
Kenneth Zener: Good morning, everybody.
Sheryl Palmer: Good morning.
Curt VanHyfte: Good morning.
Kenneth Zener: Good. Sorry, distracting. I appreciate the disclosures around inventory lockouts, et cetera, et cetera. I think it’s very informative. Can you talk to — you talked about low freeze I believe for orders as a general pattern. But can you talk to your start process? What guides this? You mentioned even flow. So I’m trying to see how that supports the orders? Or does it actually define the orders? And then, if you’re kind of targeting that low-3s, how are — what are you to that of up margins? [Technical Difficulty]
Curt VanHyfte: Ken, we might have lost you.
Kenneth Zener: Can you hear me now?
Curt VanHyfte: Yes, sir.
Kenneth Zener: You can’t hear me?
Sheryl Palmer: Yeah. You were going in and out Ken, during your question. Can you try it one more time.
Kenneth Zener: Okay. Sorry about that. I was just asking you mentioned starts and orders you mentioned in the low 3s. Can you talk about how those play together since you mentioned even flow which suggests your starts might actually determine kind of what your order pace is — and how do you or how committed are you to meeting that level low 3s would you give up margin, et cetera? Thank you.
Curt VanHyfte: Yeah. Hey, Ken, we’ve been consistently saying that we’re going to match our starts to kind of sales with maybe some flexes here and there relative to timing of year i.e. like, we did this past year we flexed our starts up in Q2, Q3 to get enough houses in the ground for the spring selling season of this year. But generally speaking, when I mentioned even flow earlier, we’re looking really for kind of cadence — predictable cadence and that’s one of the goals that we have. We find that that’s easier. It’s more efficient for us. It doesn’t put as much stress on the — our trades our internal teams, et cetera. And so we’ll do our best to kind of keep that as even as possible. But the general guide is always will match starts in theory to sales.
Kenneth Zener: Thank you very much.
Operator: Thank you. Our next question comes from Alan Ratner from Zelman & Associates. Please go ahead. Alan, your line is now open.
Alan Ratner: Hey, guys. Good morning. Thanks for all the great detail as always very helpful.
Sheryl Palmer: Good morning.
