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It looks like Ironton is investing in more residential townhome development projects, including a couple expensive SFH builds. Does the lack of affordability and changing economy concern you with these types of projects?

Around 30% of buyers are cash buyers.  The market share of cash buyers tends to increase at higher price points.  For the SFH projects, prior experience has shown we often end up selling to an all-cash buyer that is immune to interest rate shocks.  High end buyers that are not all cash usually put down very large downpayments, from the equity of the sale of the prior home.  That reduces the high interest rate exposure.

For the townhomes, these could be a first-time buyer product for an affluent household.  More likely, they will be a first-time trade up buyer.  This segment is historically less likely to use all cash.  However, since they are trading up, they will have a significant equity position from their smaller home they sold before buying our product.  The higher rates are a big headwind today.  Currently, the very low inventory is a strong tailwind.  The forces are mostly cancelling each other out at the moment.  It changes all of the time.  Fortunately, everyone on the investment committee has 20+ years of experience through all phases of the market cycle and in many interest rate environments.  We’ll do everything we can do optimize the sales.

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