The slow housing market continues to be a drain on Newport Beach homebuilder William Lyon Homes Inc.
William Lyon posted an 11% year-over-year decrease in new home orders in the second quarter, with 490 contracts to buy a new home. Orders are down 3% for the year so far.
The bright spot: California, which was the only market to post a modest increase of 15% in new home orders in the second quarter, versus a year earlier. The homebuilder signed 349 contracts in the state.
Home orders were down sharply in Arizona and Nevada. The uptick in California was aided by a larger number of developments in the state.
William Lyon is selling at 36 sites in California, an increase of five from last year.
Local work includes homes at Tustin Legacy and at several sites in Irvine. The company sold 266 homes in Orange County last year, making it the second-largest homebuilder here. Still, sales in 2006 were down 59% from a year earlier.
Turning home orders into actual sales continues to be a challenge for the company. William Lyon closed on 548 homes companywide in second quarter, down 29% from a year ago. In California, home closings decreased 32%. That’s a 5% drop from the first quarter.
The company’s cancellation rate remains troublesome. The cancellation rate for the quarter was 32%, the same rate as a year ago, but up 7% from the first quarter.
William Lyon’s backlog of homes sold but not closed stood at 796 at the end of the quarter, down 30% from a year earlier.
Second quarter earnings for the company have not yet been disclosed. The company lost nearly $27 million in the first quarter.
The slowdown in new home orders and sales seen by William Lyon has been echoed by homebuilders across the country.
The homebuilder is nearing its first full year as a private company, following a buyout last July. Chairman and Chief Executive Gen. William Lyon engineered the privatization, paying about $275 million to buy roughly 25% of company he didn’t already own.
The deal valued William Lyon Homes at about $950 million.
