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KBH Buys Lots in Valencia, Calif.

Zacks Equity Research

One of the leading homebuilding companies in the U.S., KB Home (KBH) has entered in a land purchase agreement with Newhall Land to acquire 54 finished lots for a new community known as Charleston at River Village, Valencia. Newhall Land is a community planner in North Los Angeles. The community is expected to be opened in spring.

Owing to its operational business model KBnxt, KB Home always begins construction only after a purchase agreement is executed. Therefore, consumers buying KB homes get the liberty to plan their homes according to their preference.

The consumers can choose from 5 two-storey floor plans for their homes at River Village. Each River Village home will accommodate up to six bedrooms, four and a half baths, sun rooms, junior suites and owner’s suite with large walk-in dual closets. The residents can also enjoy other facilities like parks, trails along Santa Clarita River, neighborhood retail center, restaurants and shopping centers.    

KB homes at Charleston are equipped with 1.8kW solar power system and energy-conserving appliances, which can help residents to save up to 70% on their energy bills.

KB Home intends to open more than 120 communities in fiscal 2013, with more communities scheduled to come up in the later half of the year. The community count is expected to increase by at least 15% to 20% by the end of next year.

KB Home carries a Zacks Rank #3 (Hold). With the housing market recovery gaining momentum, KB Home believes its strategic initiatives will help achieve profitability in 2013. However, a sustainable recovery in the long term can be achieved only through a broad-based recovery in the overall economy.

Other stocks in the homebuilding sector that are performing well and deserve a mention include NVR Inc. (NVR) with a Zacks Rank #1 (Strong Buy), and D. R. Horton Inc. (DHI) and Hovnanian Enterprises Inc. (HOV), with a Zacks Rank #2 (Buy).

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