Strong Year Expected for Home Builders

As new home prices move higher in Orange County, home builders can expect a banner year in profits, an analyst for E&Y; Kenneth Leventhal Real Estate Group said.

Builders have long lists of backlogged orders for the number of homes they can produce this year, said Gary Wescombe, adding: “The only thing holding sales back is a lack of land.”

Heavy demand comes at a time when new home prices rose to $313,000 in April, a 5% gain from a year ago, according to Acxiom/Dataquick Information Systems Inc. of La Jolla.

Builders already were reporting bullish results for the first quarter.

At WL Homes LLC of Irvine, first-quarter revenue totaled $83 million, exceeding the company’s goals by $9 million. The number of home deals closed also surpassed expectations during what is normally the slowest period of the year. Larry Webb, the company’s chief executive officer, credited low-interest rates, the economy and the company’s effective sales program.

WL Homes, formed in April 1998 from the merger of John Laing Homes and Watt Homes of Encino, could sell more than 2,000 homes this year, compared to 1,785 last year, and revenue could move up to $500 million from $384 million last year.

Newport Beach-based builder Presley Cos. posted a $5.4-million profit in the first three months, compared with a loss a year ago. Standard Pacific Corp., which is based in Costa Mesa, said earnings almost tripled in the quarter, while the Irvine Co. logged record sales.