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With low inventory of new and existing homes, rising demand for housing is pushing prices to lofty heights.
A recent earnings report by bellwether developer and homebuilder WCI Communities illustrates the point. The company says higher prices contributed to a tripling of profits in the third quarter compared with the same quarter a year ago.
Specifically, the average selling price of WCI's new homes rose 12% to $472,000 in the quarter ending Sept. 30 compared with the same quarter one year ago. Altaira in Bonita Springs, WCI's first condo tower under construction on the Gulf Coast in eight years, is getting average sales of $1.6 million.
“Our ability to continue to raise prices and control costs in the recent quarters has helped drive our margins higher than internally projected,” says Russell Devendorf, senior vice president and CFO, in a transcript of a call with investors posted on SeekingAlpha.com.
In response to a question from analysts, WCI President and CEO Keith Bass was doubly blunt. Says Bass: “We have the ability to raise price from a geographic perspective pretty much everywhere.”
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