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Standard Pacific Corp. Message Board

  • rarguile rarguile Feb 10, 2013 9:06 PM Flag

    Cheap Land is the key ingredient..

    Here's the OC Register's insight into SPF's purchase of raw land starting in 2009 when the skies were at their darkest..

    "In the depth of the recession, homebuilders stopped building. Sales offices closed. Buyers vanished. Developers mothballed housing projects. But as the housing industry reeled from a global economic meltdown, Irvine-based Standard Pacific Homes began to invest in the next housing boom.

    By late 2009, the company had begun to buy land.

    “If there’s a silver lining to the lousy market, it’s the land-buying market,” former CEO Ken Campbell said during a 2010 call with industry analysts. “(In) 2014, the market’s going to be good, and you need to buy the land now for 2014.”

    By the end of 2012, Standard Pacific had spent $1.6 billion, accumulating almost 20,000 home sites in seven states in three years. The company plans to spend from $600 million to $900 million more on land in 2013."

    Even if your construction costs are the same as everyone else, it must be a major advantage to have cheaper building lots to build your homes on..

    Sentiment: Buy

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    • Yes, cheap land is good. It is also important that there be enough people who are employed so that they have a regular income and can buy a house. If we enter an era of austerity and high unemployment, don't expect housing to do well.