Core Insights - The average listing price for second-hand homes across 65 cities has decreased to 13,409 yuan/m², indicating a downward trend in the real estate market [2][3] - The average new home price has also seen a decline, now standing at 17,716 yuan/m², reflecting a similar market sentiment [14][15] - The confidence index among real estate agents has dropped to 88.4, with a significant portion expecting prices to remain stable or decrease in the coming months [12][21] Second-Hand Housing Market - The average listing prices for second-hand homes in major cities are as follows: - Beijing: 43,947 yuan/m² - Shanghai: 49,355 yuan/m² - Shenzhen: 55,837 yuan/m² - Guangzhou: 32,488 yuan/m² - Chengdu: 13,266 yuan/m² [2][3] - The number of new listings for second-hand homes has decreased, with notable declines in cities like Beijing and Shenzhen [4][7] New Housing Market - The average new home prices in key cities are as follows: - Beijing: 54,848 yuan/m² - Shanghai: 56,267 yuan/m² - Shenzhen: 56,637 yuan/m² - Guangzhou: 32,065 yuan/m² [14][15] - The overall demand for new homes has also seen a decline, with a 0.82% drop in search activity across 65 cities [17] Market Sentiment and Expectations - Real estate agents' expectations for the second-hand housing market in August 2025 show that 40% believe prices will remain stable, while another 40% anticipate a decrease in transaction volume [12][10] - The confidence index for homebuyers is at 90.6, indicating a cautious outlook among potential buyers [21][22]

Financial Data and Key Metrics Changes - In Q2 2025, the company delivered 1,326 homes at an average sales price of $664,000, generating $880 million in home sales revenue [4][12] - Adjusted net income was $69 million, or $0.77 per diluted share, reflecting a disciplined pricing strategy and cost control [5][13] - Homebuilding gross margin, adjusted to exclude an inventory-related charge, was 22.1% [4][13] - The company ended the quarter with $1.4 billion in total liquidity, including $623 million in cash [6][15] Business Line Data and Key Metrics Changes - The company generated 1,131 net new home orders in the quarter, with a monthly absorption rate of 2.5 homes per average selling community [5][12] - The absorption pace varied by region, with the East showing a stronger pace of 3.1 homes per community per month, while the Central region had a pace of 2.3 [14][15] Market Data and Key Metrics Changes - The company noted that several markets are experiencing rising housing inventory levels and a softer pricing environment, particularly in Sacramento and Arizona [5][14] - In contrast, the Inland Empire, San Diego, and Seattle markets showed stronger demand [14][61] Company Strategy and Development Direction - The company is focusing on balancing pace and price on a community-by-community basis, moderating its start pace to normalize spec inventory [6][10] - New market expansions in Utah, Florida, and the Coastal Carolinas are expected to contribute to meaningful growth over time [10] - The company plans to continue favoring price over pace, citing consumer confidence as a critical factor [49][50] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term fundamentals of the housing market, driven by favorable demographics and a persistent supply-demand imbalance [19][20] - The near-term environment remains challenging due to policy uncertainty and geopolitical tensions affecting buyer confidence [5][10] Other Important Information - The company returned $100 million to shareholders through share repurchases, reducing its share count by 3.5% in Q2 [8][9] - The company has a disciplined land investment strategy, focusing on opportunities that yield the strongest returns in core markets [7][10] Q&A Session Summary Question: Confidence in hitting fourth-quarter volume guidance - Management indicated confidence in meeting the implied fourth-quarter volume guidance, stating they have sufficient move-in ready and spec homes [22][23] Question: Expectations for incentives and gross margin - Incentives were 7.1% in Q2 and are expected to trend slightly up, which is factored into the gross margin guidance [24][26] Question: Details on the impairment charge - The $11 million impairment charge was related to a challenging Bay Area project, with a watch list for projects with margins around 10% [30][31][32] Question: Absorption trends throughout the quarter - Absorption started strong in April, peaked in May, and trended down in June, following seasonal patterns [38] Question: Strategic approach to pace and price - The company will continue to favor price over pace, citing consumer confidence as a driving force [49][50] Question: Current build time and improvement opportunities - The average build time is currently 115 working days, with ongoing initiatives to reduce cycle times [92][93]