Allan Merrill: Yeah. I mean, with cycle time still stuck above six months, I mean, there — as you saw prices down in the fall, you’ll start to get the benefit of some of those this spring. But it’s really starts that have occurred November, December and into January and February where we’re seeing those lower lumber costs and that’s where we get into our fourth quarter. I think that there will be improvement in our direct costs in the second and third quarter, but I think it’s going to be pretty modest honestly, so weighted average thing as much as anything where the weighted average of homes with lower costs will be far better by the time get to the fourth quarter. The lumber part will play a big role in that, but it’s certainly not the only category where we are seeking and achieving cost reductions.
Julio Romero: Understood. Thanks very much for taking my questions.
Allan Merrill: Of course. Thank you.
Operator: Thank you. Our next question is from Alan Ratner with Zelman & Associates. You may go ahead.
Alan Ratner: Hey, guys. Good afternoon. Thanks for all the great info as always. First question, I’d love to drill in a little bit on the January trends and how that plays into your thinking on pricing and incentives and just the overall kind of environment there? Obviously, it’s very encouraging to see the improvement in sales activity. But you brought it up yourself, I mean, the 2.5, 2.6 sales pace that you saw in January and that you’re expecting for the quarter. If we go back pre COVID, your fiscal 2Q absorption pace was right around 3.3 every year. There wasn’t a whole lot of volatility there. So you’re about 25% below what would consider to be normal right now even with the doubling. So how do you think about pricing there?
Are you still discounting or increasing incentives or adjusting base prices to try to get that pace closer to the long run average or are you looking at the sequential improvement in saying, hey, this is really good off of a weaker fourth — calendar fourth quarter. Let’s kind of pause here and see if the momentum continues in February and March before we get more aggressive on the pricing front.
Allan Merrill: Alan, it’s an excellent question and a compound question. The smart aleck answer is, it is both. And I’ll go a little further than that because it really is an individual communities, an important discussion that we’re having with our division leaders, our sales leaders we do want to get sales basis back into — certainly seasonally into the 3s. And that might happen this year, I don’t know. But one good month does not an entire quarter make. We’re mindful of the environment has been pretty uneven over the last six months. So we were trying to be a little careful of not just assuming that there would be this snapback and that we were somehow entitled or it was mathematically assured that this would continue into February and March.
