Bob Schottenstein: Yes, I’ll let Phil give you the — yes, and great question. I’ll let Phil give a little more of the detail. We’ve increased on — it’s a subdivision business, so it’s not necessarily the case in every subdivision. But on average, our plan is to have more specs than maybe we would have had three or four years ago. We’ve ramped up our specs for all the reasons that you mentioned. And then the other thing is as — in terms of mix with Smart Series and also town homes — attached town homes, which represent an increasing percentage of our business company-wide, that will also result in more specs with these four-unit, six-unit buildings being the most common form of town home. So, you start a building with one or two sales, you automatically have three or four specs out there. Phil, you want to add anything else to that?
Phillip Creek: Yes, as far as spec levels, again, in general, depending on the month of whatever, we’re selling 50% to 60% specs. One of the good news is that the gross margin on specs versus to-be-built is not very much in some markets. Matter of fact, it’s like really, really close. So, we do feel good about our spec levels. We are doing more attached town houses, we’re doing more smaller single-family detached, and by its nature, we’re doing a few more specs in those, my specs to get up to the 2,200, 2,300, 2,400. But again, as our store count moves up, that’s about 10 per store. And then having two, three, four finished specs again seems like a good number to us —
Bob Schottenstein: Per community.
Phillip Creek: Per community. So, we do feel good about our spec levels. We want to make sure that, we have what we need.
Alan Ratner: Makes sense, all right. Well, appreciate it all, and best of luck in the New Year.
Bob Schottenstein: Thanks, you too.
Operator: Your next question comes from Jay McCanless from Wedbush. Your line is now open.
Bob Schottenstein: Hey, Jay.
Jay McCanless: Hey. Good morning, everyone. Hope you all are doing well. Bob or sorry, Phil, if you don’t mind, what was the monthly order pace through 4Q and maybe any color you can give us on January?
Bob Schottenstein: I’ll take the last part of that first and then Phil will give you the pace. Somewhat surprising, well, just we start over. What I mentioned was, is that the increase in demand and traffic that really sort of intensified during the fourth quarter and that resulted in December being our best month of the quarter. That has continued and that increase in traffic and demand. And while technically January is not over, our January sales will exceed last year’s. We’re very pleased with the way the year is starting up and optimistic about the selling season. Phil can give you the details on pace.
Phillip Creek: Yes, sales pace, Jay, in the fourth quarter, it was 2.5. In the fourth quarter last year, it was 1.8. And again, in the third quarter, we were 34. So, again, we have been improving pace and have a big focus on that. Hope to continue improving that.
Jay McCanless: Great. And then, could you talk about the community count? Because you all guided, I think to like 225 maybe and you came in at 213 maybe what’s going on there. And I know you said you’re going to open 50% of the new stores in the first-half of ’24, I mean is it going to be a pretty big step up in, in the total community count in the first quarter sequentially?
Phillip Creek: Yes, Jay. Again, overall, we expect our community count this year to be on average up about 10%. Last year, we were a little short of where we thought we would be at year end, primarily because about 10 stores were delayed. Most of them are just flattening into this year. We do expect over half the stores we’re opening this year to be the first-half. So, if you kind of look at that the year in general, we ended the year with 213. We expect to get to that 225 type level by the middle of the year. And again, the second-half of the year gets a little more difficult, because it is taking a little longer to develop land and those types of things. But we do feel comfortable saying today we think we’ll be up 10% on average.
Jay McCanless: Okay, all right. And then, I guess, Alan already asked you the gross margin question, but just maybe what type of pricing power are you seeing currently? Maybe what percentage of your communities during Q4 were you able to raise prices, raise base pricing?
Phillip Creek: I think pricing power is limited. We can continue to stay at this 25% gross margin level this year. We’re going to have a phenomenal year. And that’s our goal. I don’t know that I can with any kind of certainty whether we will be able to grow margins. I think that the balance between demand and price right now within the market generally is really good. And like I said before, a year ago, I thought margins were going to fall off 100 or 200 basis points just because of the higher rates and so forth. And that didn’t happen last year. We were really pleased that our margins held steady. I think that’s I think that strong performance, I think, is a testament to our people and our product and our communities. But I think that, I think knowing what we know today, I’m not sure how much pricing power we’ll see, but I think we’d be thrilled. And I think there’s a good possibility that our margins will remain as we talked about with Alan in this 25% range.
