Douglas Yearley: Sure. So Susan, our model right now — we have about 2,200 specs to answer your question. And those are — again, we define a spec as foundation or beyond. And we sell a lot of these with enough time left for the client to pick finishes. So they can get kitchen cabinets and countertops and flooring and some of the other fancy things that we show up in our design studios. Our business model right now is to be about 30% to 35% spec which means we will be starting more homes without a buyer. So we’re not holding them off the market. But that’s the business model at the moment. It’s obviously market-dependent, community dependent based upon local dynamics, but that is what we are targeting. And I’m very comforted when I look at those 2,200 specs and where they are spread between permit and foundation and framing and finishes and complete because we break all that down, it’s a really good mix.
So when the client comes in, they want a house in 60 days, we may very well have it. If they want in 4 months and they want to fix some finishes, we may very well have it. It’s really nicely spread. So what we’re talking about is the cadence of the starts of the new specs to continue to fill in as we sell what we have. And we have a very detailed plan in place, but it should get to about that 30% this year.
Martin Connor : Susan, I think it’s — and Doug hinted at this but it’s very carefully managed process as to how many specs to start based on what you just sold, what stage of construction other units are in. And so we’ve developed some pretty sophisticated ways looking at this by market, by community, by stage of construction by pace of sales.
Susan Maklari: And given the guide and the commentary, is it fair to assume that the margin that you’re realizing on those specs is not materially different than what you’re getting on the core product?
Douglas Yearley: So through COVID, specs generated a higher margin because people were paying a premium to get into a home quickly. From the summer through the end of the year, specs were getting a lower margin than to be built because the market was a lot softer as buyers were on the sideline. And now we are trimming the incentives on specs faster than the to be built. And so that’s a long answer to say, yes, today, the margin between spec and to be built has narrowed. And we think if this demand for specs continues, we’re going to get back to having the spec margin be a bit higher, but we’re not there yet, but it is beginning to trend in that direction.
Operator: And the next question comes from Truman Patterson of Wolfe Research.
Truman Patterson: First, I’m just hoping to get perhaps a clean number on orders pricing because a couple of quarters ago, you think there was an accounting and mix issue in the order ASP. And I understand that incentives have reduced recently, but sometimes incentives can turn into base price cuts, et cetera. So I’m trying to understand what core pricing might be down from peak between base price cuts and just all in incentives?
Martin Connor : Well, we tried to address that in our comment that 1/3 of the price difference this quarter versus last quarter was associated with incentives. So call that $35,000 to $40,000.
