Home builder KB Home Corp. said Wednesday that its new-home orders in California fell more than 20% during its fiscal first quarter compared with the same period a year earlier.
The Los Angeles-based company said the decline was not indicative of weaker demand. Rather, spokeswoman Debra Hotaling said, the drop was the result of the company's price increases and other efforts to slow sales to a more manageable pace in one of its largest markets.
"We would have ended up running through all our land and selling out all our communities," Hotaling said. "It's important that we have a very even level of sales."
She said there was no change in the firm's previous financial forecasts for its first quarter ended Feb. 28 and the fiscal year.
Hotaling said KB, which like other home builders is coming off a very strong year, anticipates double-digit growth in sales and earnings this year and plans to launch about 100 new projects in the U.S. The firm will release its first-quarter results March 14.
Nationwide, KB Home said new-home orders overall rose 0.8% in the first quarter to 5,686, with the Southwest and Southeast showing strong increases.
But the firm's West Coast division, which is entirely California, booked orders for 1,355 homes, a decline of 20.2% from a year earlier. In contrast, the division's orders in the first quarter of the previous fiscal year were up 44% on a year-over-year basis.
KB's report came after another leading home builder, Lennar Corp., said this week that orders in its Western region fell 14% during the three months ended Feb. 28.
KB Home shares Wednesday dropped 49 cents to $43.86 on the New York Stock Exchange. That followed a 5% decline the previous day, when KB and other home builder stocks slid after Federal Reserve Chairman Alan Greenspan publicly raised concerns about a slowdown in the housing market.