Standard Pacific Corp. (NYSE:SPF) is unique among homebuilders in that their primary market is the move-up market. In other words, their buyers are upgrading to a premier community. Their price range goes up to $1 million and their average selling price in California is $500,000. Standard Pacific Corp. (NYSE:SPF) should continue to perform well as the luxury market is recovering faster than the first-time home buyer market is.
PulteGroup, Inc. (NYSE:PHM)
builds homes in approximately 55 markets in the U.S. The company builds homes under the Centex, Pulte Homes, and Del Webb brands. PulteGroup, Inc. (NYSE:PHM), like Standard Pacific Corp. (NYSE:SPF), had a good first quarter of 2013. Net income for the quarter was $82 million versus a net loss of $12 million in the prior year. According to PulteGroup, Inc. (NYSE:PHM) Chairman, President & CEO Richard J. Dugas:
The stronger demand which the housing industry saw throughout 2012 has carried into the spring selling season of 2013. We experienced higher traffic in our communities with buyers feeling a greater sense of urgency given the combination of limited product inventory and rising prices found in many markets throughout the country.
Home sale revenue for the first quarter was up 35% to $1.1 billion compared to $814 million last year. Closings increased 23% to 3,833 homes and the average sales price increased $26,000 to $287,000. For the quarter, the home sales gross margin was 22.9%. Contract backlog at quarter end was $2.4 billion and represented 7,825 homes.
This was just a great quarter for PulteGroup, Inc. (NYSE:PHM). Revenue came from home sales and not from real estate transactions or land sales. The company was also able to raise home prices. Those are two very bullish signs going forward.
PulteGroup, Inc. (NYSE:PHM) is one of the top builders of active adult communities in the U.S. This segment is one of the fastest-growing segments in housing. As more and more baby boomers retire, look for PulteGroup, Inc. (NYSE:PHM) to benefit.
I think all three stocks are great ways to play the housing recovery. Even though all three have performed well over the past year, they are still off their all-time highs last seen in 2005. I think all three are worth buying.
The article Play the Housing Rebound With These 3 Homebuilders originally appeared on Fool.com and is written by Mark Yagalla.
Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.