Demand for new homes in California continues to be on the rise, with KB Home reporting an increase in revenue in 2015. Due to higher land costs and an impairment in charges, however, the company’s profits have diminished. The financial state of KB Home is merely a reflection of a pattern that is seen throughout the state as available inventory continues to fail to keep up with demand.
Building a New Home
Building a new home from scratch offers a number of benefits. Not only does it provide you with the opportunity to build a home to your specifications, but you can also be relatively certain that you will not run into any unexpected problems after you move into the home.
For those who are interested in building a luxury home, having it built from scratch offers the added benefit of ensuring the home comes equipped with all of the latest features and components. For eco-friendly homebuilders, you can also be sure the home is constructed with green materials that are better for the environment and safer for your health.
While there are many benefits to building a new home, it can be tricky to build new in California due to a lack of available land. In many cases, building new involves purchasing an existing home, tearing it down and building a new home on the land that was previously occupied. The lack of available land is precisely why homebuilders such as KB Home are experiencing a decrease in profits despite an increase in revenue.
KB Home Increases Earnings
According to a report released by KB Home, the homebuilding company experienced a 43 percent increase in its revenue during the third quarter to $843.2 million. Despite experiencing an increase in revenue, the company posted earnings of $23.3 million, which is down from $28.4 million from the previous year. This translates to a drop from 28 cents per share to 23 cents per share. The cut in profits is largely due to the fact that land costs increased from $3.4 million last year to $40.3 million this year combined with a $3.5 million housing inventory impairment and land option contract abandonment charges.
Overall, KB Home reports that housing revenue increased 36 percent to $798.6 million, with the company delivering 2,236 homes. This represents a 25 percent increase when compared to the same time the previous year. In addition to increasing delivery volume, the company has also enjoyed a 9 percent increase in the average selling price to $357,200.
While the company experienced a loss of profit, the increase in revenue represents the 16th straight quarter of year-over-year revenue growth. This growth is largely due to the fact that home sale prices continue to increase throughout California.
Whether you are interested in constructing a new home or you would like to purchase a home that has already been built, our team of expert real estate professionals can help you find the right piece of real estate to suit your needs. We specialize in luxury properties in Southern California’s most exclusive communities.
Consider these properties below priced fro $4 Million to $8 Million for your next home. If you find any you like, contact one of our specialists for more information.
$5,400,000 : 3710 GLENDON Avenue, Los Angeles0 beds, 0 bath
$5,000,000 : 2815 NICHOLS CANYON Road, Los Angeles5 beds, 7 baths
$4,500,000 : 1460 N DOHENY Drive, Los Angeles4 beds, 5 baths
$5,850,000 : 4120 NORMAL Avenue, Los Angeles0 beds, 0 bath
$4,099,000 : 800 N OGDEN Drive, Los Angeles5 beds, 6 baths
See all City of Los Angeles Luxury Homes For Sale.
(all data current as of 7/24/2017)
Listing information deemed reliable but not guaranteed. Read full disclaimer.