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New Construction Homes Are Still Selling During Coronavirus Pandemic
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Lennar Corp.: Coronavirus Won’t Kill New Construction
In a call with industry analysts, Lennar’s chairman said they’re working on virtual ways to connect with buyers, and construction has been halted in only a few cities.
NEW YORK – Low interest rates and inventory will draw buyers to the market, Lennar Corp.’s executive chairman, Stuart Miller, said on a conference call with industry analysts last week. The home builder, one of the largest in the country, said it was working on new ways for buyers to purchase new homes virtually, such as by leveraging its digital programs and offering drive-through closings. Such closings enable home buyers to sign documents from their car.
“Even in the current environment, we are selling homes,” Miller said. “Since the first quarter, new orders continue to be strong.”
Miller acknowledged that construction has been halted in some cities by local governments due to shelter-in-place restrictions aimed at slowing the spread of COVID-19. But Miller said Lennar hasn’t halted its production yet, and the company will continue to build homes and adapt to the changing environment.
Miller believes that low mortgage rates could incentivize a rush of new-home buyers once the coronavirus pandemic eases. Still, the company has slowed its land purchases and focused on reducing its outflow of cash to boost its liquidity and balance sheet position, a statement read on its earnings.
Lennar reported strong first-quarter earnings, totaling $398.5 million compared to $239.9 million in the first quarter of 2019. Its new orders also rose 18% on a year-over-year basis, with 12,376 homes in the first quarter.
Source: “Lennar Says Homes Are Still Selling Despite Coronavirus,” The Real Deal (March 19, 2020)
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