Good afternoon, and welcome to Green Brick Partners earnings call for the third quarter ended September 30th, 2022. Following today's remarks, we will hold a Q&A session. As a reminder, this call is being recorded and will be available for playback. In addition, a presentation will accompany today's webcast and is also available on the company's website at investors.greenbrickpartners.com. Joining us on the call today is Jim Brickman, Co-founder and Chief Executive Officer, Rick Costello, Chief Financial Officer, and Jed Dolson, Chief Operating Officer. Some of the information discussed on this call is forward-looking, including the company's financial and operational expectations for 2022 and beyond. In yesterday's press release and SEC filings, the company detailed material risks that may cause its future results to differ from its expectations. The company's statements are as of today, November 3rd, 2022, and the company has no obligation to update any forward-looking statement it may make. The comments also include non-GAAP financial metrics. The reconciliation of these metrics and the other information required by Regulation G can be found in the earnings release that the company issued yesterday and in the presentation available on the company's website. With that, I'll turn the call over to Jim Brickman. Thank you. During our call today, we are going to discuss the current housing landscape, Green Brick's overall business strategy, and our land and lot position in much more detail than in past calls. Rick will discuss Q3 2022 financial results in depth, and then Jed will discuss the market dynamics, capital allocation strategy, and our supply chain. We are pleased to report another strong quarter despite multiple challenges the home building industry is facing. Residential revenue for the third quarter of 2022 increased 17.1% year-over-year to $397 million based on an increase in our average sales price of 33%. This contributed to a record high home building gross margin of 32.4%. As a result, the company generated $74 million in net income, or $1.57 per diluted share, representing a year-over-year increase of 65%. Year to date, annualized return on equity was 34.9%, about 1,100 basis points higher than last year. We believe this demonstrates our ability to consistently deliver superior returns to our shareholders. Looking ahead, the U.S. housing market has taken a dramatic shift as mortgage rates have more than doubled from a year ago and hit a 20-year high in October. Consistent inflationary pressure and high mortgage rates have been keeping potential home buyers on the sidelines. Despite a strong labor market, consumer confidence has been negatively impacted by geopolitical risks, political uncertainty surrounding the upcoming elections, supply chain disruptions, and particularly how aggressively the Fed is hitting the economic brakes to contain inflation. Until the dust settles, we expect the housing inventory and housing market to remain very choppy. While it is difficult to accurately predict what will happen in the short term, our long-term view on the immense imbalance of housing supply and demand remains intact. A decade-long underproduction of housing has resulted in a gap of approximately four million housing units that will take many years to adjust, if not another decade. Recent and expected future reductions in housing starts are likely to exacerbate the housing shortage. Our markets have one of the best demographics and immigration trends. Many builders have already reported their results. As you have heard on these calls, Dallas and Atlanta, which produce over 90% of our revenues, have fared much better than markets such as California, Denver, Phoenix, and Las Vegas. For example, the DFW Metroplex, our largest market at 70% of our year-to-date revenues, has attracted over 140 companies for office relocations and/or expansions in 2021 and 2022. The resulting in-migration means more people and more housing. We believe the job growth, economic diversity, a younger population, climate, tax rates, and relative affordability in our core markets, vis-à-vis the rest of the nation, will result in our core markets continuing to outperform the nation. Let's take a quick look at slide four of our presentation. Despite the slowdown in sales, on a national scale as shown here, inventory of both existing and new single-family homes remains near historic lows. We take a closer look at Dallas on slide five. In DFW, existing home listings represent a 2.2-month supply on the left graph, and finished new home inventory represents a 1.3-month supply on the right graph. Both measures are below pre-pandemic levels. We expect existing inventory to increase in Q4 and into 2023, but also see that builders are quickly responding to decreased demand by lowering starts. The byproduct of lower starts is that we believe construction costs have peaked. Furthermore, as the third-largest builder in DFW, we believe that our scale and this slowdown will provide us leverage to reduce our construction spend. We believe that existing home inventory growth will continue to be limited due to homeowners leasing rather than selling their homes based on the slowing market. Inventory will be further limited due to homeowners who have purchased or refinanced over the past 10 years, and particularly during the last three years because they have very low mortgage rates, which disincentivizes selling their residences. We believe that long-term home demand will continue as millennials now need their first home and are financially ready. We continue to see a record good level of rents rising in our primary markets. We highlight the growth of millennial cohort on page six of our presentation. Please turn to slide seven, where we focus on Green Brick's strategic advantages. First, we have been disciplined and deliberate on maintaining a strong balance sheet. Despite purchasing almost 10% of our stock year to date, our debt to total capital ratio fell to 28%, and our net debt to total capital was 25.5% at the end of the quarter. About 89% of our outstanding debt is long-term fixed rate with an annual cost of about 3.5%. We issued $50 million of perpetual preferred stock in late 2021 at a 5.75% coupon that would be prohibitively expensive to issue today. Our goal is to always have a superior balance sheet and ample dry powder. Second, as Jed will discuss in more detail later, we have been consistently disciplined with our land investment underwriting, which leads to a superior land pipeline to support our business. Unlike many of our peers who operate under a land light playbook, we do not use land banking to secure lots. We believe this puts us in a stronger position relative to these peers for multiple reasons. First, cost of financing. The land bankers who provide financing for land light builders typically charge a high cost of capital. The recent rise in interest rates have made previously expensive land bank capital much more expensive. As noted in peers' earnings calls, because these increased costs and slowing demand, some builders are walking away from lot option contract or land bank deals. These are typically in C locations. We expect land banking capital will contract and become more expensive in the future, and third-party lot development will be more challenging. Second, take down costs. Builders must buy lots from lot developers or land bankers at retail prices instead of wholesale prices. Green Brick, on the other hand, is the developer or co-developer on over 90% of our lots owned and controlled, giving us a wholesale pricing advantage on the majority of our lots. Third, price escalation. Many lot contracts and most on A location neighborhoods have a 6% price escalator, which means that builders must pay 6% more to purchase a lot the following year, even if the housing market slows further. While there is a lot of renegotiating taking place on option lots, very few renegotiations are taking place on lots in prime A locations. High-quality lots in prime A locations are not easily replaceable, and those neighborhoods are performing better than lots in C locations. Lastly, penalty. Most high-quality option lots demand 15% or more of retail lot price as a first loss earnest money deposit, making it a very expensive proposition for builders to walk away from their lots. At the end of the quarter, we own and control approximately 26,000 lots. We have no need to buy land to grow our business and don't plan to buy much or any land in Q4 2022 or well into 2023. Our third strategic advantage is location, and location. Not only do you operate some of the best markets in the country, but you also primarily build in infill submarkets. Over 80% of our year-to-date revenues were generated from those infill markets where supply is constrained, accompanying significant demographic tailwinds. We believe our markets will outperform the rest of the country. Jed will expand this discussion on our land and lot position, as well as our preferred locations later on. Fourth, operational efficiency. We have invested significant capital and resources to improve our technology and processes across Green Brick's brands. These investments have provided us more transparency into our workflow and cost structure. As a result, as the market slows, we believe that we will have the ability to react quickly to improve overhead efficiency and negotiate what we think will be better pricing with vendors and subcontractors. Finally, and most significantly, as shown on slide eight, our industry-leading gross margins at 32.4% gives us a tremendous amount of cushion to manage pace versus price. With that, I'll now turn it over to Rick. Rick? Thank you, Jim. Please turn to slide nine of the presentation. Our total revenues in Q3 2022 increased 19% year-over-year to $408 million, primarily driven by a 33% increase in ASPs of closed homes to $607,000. This was partially offset by a 12% decline in the number of closings to 650 homes. The decline in the number of closings was due to a lower start pace in prior quarters and a smaller backlog entering the quarter because of weakened demand. Higher residential units revenues led to a 550 basis point year-over-year improvement in home building gross margin to 32.4% in Q3 of 2022, breaking the previous record of 32.3% set in Q2 of 2022. Although we are not likely to maintain this level of margin in this housing market, our ability to outperform our peers has been consistently demonstrated quarter-over-quarter, and we believe we will continue to generate superior margins in a more trying time. SG&A leverage ratio increased slightly year-over-year to 10.9% during the third quarter of 2022. As a result of higher revenues and gross margins, net income attributable to Green Brick Partners increased 52% year-over-year for the quarter. Additionally, our reduced tax rate resulting from energy tax credits further improved diluted EPS for Q3 2022 to $1.57 for the quarter, a year-over-year growth of 65%. As mortgage rates rose to their highest level in 20 years, housing demand cooled quickly. Net new home orders during the third quarter of 2022 decreased 41% year-over-year to 404, while our quarterly absorption rate per average active selling community decreased to 5.3 homes. Despite the lower sales pace, our decline in new order revenues during the third quarter was just 34%, smaller than the decline in order count as our average sales price in new orders rose by 12.5% from $553,000 to $622,000. Our cancellation rate increased to 17.6% for the third quarter of 2022, compared to 6.9% for the same period last year, and was up from 11.4% last quarter. As you would expect, our cancellation rate is the highest with Trophy's entry-level buyer. We do not see this improving soon. Jed will provide more commentary on sales and market dynamics. On slide 10, we highlight our year-to-date results. Our total revenues were up 40% year-over-year on an ASP increase of 31%. Our year-to-date gross margin was up 460 basis points to 31.1%, and our SG&A leverage improved 150 basis points to 9.4%. Our net income attributable to Green Brick was up 86%, with our diluted EPS up 94% year-over-year. Our annualized year-to-date return on equity was up 1,090 basis points to 34.9%, the highest among our peer group. Backlog at the end of the third quarter of 2022 declined 45% year-over-year to $564 million. This was due to a 54% drop in backlog units, partially offset by a 20% increase in the average sales price of backlog units. The drop in backlog units is a function of the lower levels of new home orders and the higher cancellation rate described above. As a result of fewer sales, increase of units closed, and decrease in backlog units, spec units under construction as a percentage of total units under construction rose to 65% at the end of September 2022 from 31% a year ago. We are assessing our inventory level on a daily basis to make sure we are aligning our sales pace starts and construction. Consequently, we expect to start fewer homes in Q4, and this trend will likely continue into the first part of 2023. As Jim mentioned earlier, we continue to deleverage our balance sheet with strong operating cash flow and one of the lowest debt to total capital ratios of 28%. As of September 30, 2022, our weighted average cost of debt was 3.5% and 89% of the outstanding debt was fixed. Maintaining the strength of our balance sheet will remain as a top priority. I will now turn it over to Jed for market commentary. Jed? Thank you, Rick. Please turn to slide 11. The impact of rising interest rates was felt in our markets. As Rick mentioned earlier, our net sales orders during the quarter were down 41% year-over-year, with revenues on sales orders down 34% because of our continued increase in average sales price. As seen on this slide, even though our cancellation rate has continued to go up since May of this year, it is still outperforming most of our peers. Cancellations were heavily weighted to buyers who signed contracts when interest rates were lower. We also experienced higher cancellations among products with lower price points and lower deposits compared with the rest of our portfolio. People are still buying houses as there is still unmet demand. We have nondiscretionary buyers who need to move out of rentals due to milestone changes in life, such as marriage, new child or new job. During this price discovery phase, we continued to be laser focused on several key priorities that were laid out last quarter, which are, one, preserving backlog and acting quickly to restore sales momentum. Two, being stringent and nimble with capital allocation. Lastly, managing bottlenecks in the supply chain to bring down production costs and cycle times. We are carefully managing our sales pace and starts on a community by community basis. The market as a whole experienced an abrupt slowdown in June. Since then, we have adopted more aggressive incentives in underperforming communities. Sales activity picked up in the second half of July while mortgage rates temporarily dropped before rising again in the second half of August. With an increased level of incentives, we were able to entice a reticent market and maintain a constant sales pace from June through September. Overall, discounts and incentives for new orders were up from 2% the previous quarter to 4.2% in Q3 2022. During October, traffic and sales pace have been slower, with monthly sales down approximately 19% versus the prior four-month average and incentives increasing from 4.2% to 6.3%. Discounts and incentives include base price reductions, rate buydowns, and other closing credits. We expect elevated incentives, higher cancellations, and lower sales volume to remain the biggest headwinds to our margin performance in the near term. We will continue to monitor the market carefully to adjust our pricing and to balance starts and inventory with sales. As Jim noted, our industry-leading gross margins allow us to be very aggressive pricing our homes. Next, we continue to focus on managing capital allocation prudently. Considering current market developments, we have significantly slowed down our land acquisitions and expect the trend to continue until the land markets adjust. Additionally, we conducted a thorough review of our lots owned and controlled. As a reminder, a vast majority of our lots were purchased before the upsurge of land prices on top of conservative underwriting. Therefore, our underwriting for these lots still generates adequate returns in today's environment, and we do not see immediate impairment risk and have no communities on a watch list. Given recent volatility in the market and slower sales, we are planning to postpone land development in certain communities that are entering the next phases of land development. As shown on slide 12 and 13, communities that have been delayed in the DFW area are more peripheral locations, while the majority of our land book in DFW and in Atlanta are in infill locations. We project that our land and lot development spending will decline approximately 45% next year from full year 2022. We are surveying the market conditions to determine the best cadence and timing for the resumption of these development projects. Please turn to slide 14. The self-developing nature of our land business gives us tremendous flexibility to control delivery schedule and costs, and an upper hand on achieving higher margins. Despite slowdown in development, we expect to complete almost 8,800 finished lots between 2022 and 2023 in 73 communities. As shown on slides 15 and 16, our 2023 deliveries in DFW and Atlanta will be concentrated in infill and adjacent desirable areas. Depending on market conditions, as many peers pull back, we expect to have the opportunity to increase our count on ending active selling communities by 20%-30% from the end of September over the next four to five quarters. We believe these new communities with a favorable land and lot basis provide the optionality of aggressively pricing without the overhang of protecting backlog. We also believe this will generate favorable sales per community at more traditional gross margins. We expect this capability will be an opportunity to build market share and effectively manage price per phase decisions. In addition to the flexibility regarding timing of community openings, our self-development of lots is expected to generate higher margins and therefore more pricing flexibility compared to builders who have accumulated higher priced lots from third-party developers. This also provides us with the capability to start more homes under construction without an outlay of cash to purchase these finished lots when demand returns. Next, I would also like to provide some update on our expansion into Austin. In August, we fulfilled several key roles, including our new division president, Ryan Durkee, to operate the Trophy brand in Austin. Ryan brings tremendous experience and knowledge in home building, and we are excited to have him join the team. Austin is a tough market today, but we think we will be able to deliver homes from $275,000 where there's a pent-up demand. We will keep everyone posted when we break ground on homes in early 2023. The last focal point for us is to value engineer to bring down cycle times and costs. Our cycle time for homes closed during Q3 of 2022 vary significantly by brand and price point, but in aggregate, shortened modestly by 21 days sequentially. Although we are not back to pre-COVID levels, we are pleased to see improvements in the supply chain across multiple categories, especially with front-end construction. The fall-off in starts across the industry gives us more leverage in negotiations on new communities as we become more selective with vendors as in regards to both pricing and quality. To be clear, we're still experiencing struggles on certain aspects of the supply chain, but we will continue to work with our trade partners to resolve bottlenecks in the supply chain and unlock additional savings. With that, I'll turn it over to Jim for closing remarks. Jim. Thank you, Jed. I would like to thank our entire Green Brick team for their continued hard work in this more challenging environment. We believe that Green Brick is entering this cycle in a strong position. We have a significant footprint in some of the best markets in the country, a broad spectrum of product types and customer bases, a strong balance sheet and ample dry powder to deploy, a disciplined land pipeline to support growth, and most importantly, an experienced team in place to navigate our business in this environment and achieve our long-term goals. As far as stock buybacks and capital allocation are concerned, for the first time in many years, we think unique investment opportunities may arise in 2023. Consequently, we expect to evaluate buying back stock versus these direct investment opportunities as the opportunities arise. This concludes our prepared remarks. We will now open the line for questions. Thank you. If you would like to ask a question on the phone lines today, please press star one on your telephone keypad. To remove yourself from the queue, you can press star one again. Please limit yourself to one question and one follow-up. If you have additional questions, please feel free to re-enter the queue. Once again, everyone, that is star one to ask a question. We'll take our first question from Carl Reichardt with BTIG. Thanks. Morning, guys, or afternoon, or I'm not sure what time it is, actually. Hi, Carl. I wanted to ask about the SG&A, which was ahead of what we were expecting, and there was some negative leverage despite the relatively good-sized increase in revenue. I know there was some unabsorbed overhead, I think you said in the Q. Can you just expand on why that number increased year-over-year on a percentage basis? What kind of run rate should we be thinking for core G&A on a go-forward basis? Those are great questions, Carl. This is Rick. You know, first, you know, if particularly if you look Q- to- Q, we went from $512 million of home building revenues in Q2 down to $397 million in Q3. Most of SG&A. Well, I shouldn't say that. Commissions generally are going to be your most significant singular variable cost. In the short run, a lot of your overhead are going to be fixed costs. In the long run, everything is variable, right? So about 60% of the quarter-to-quarter increase from 8.2% to 10.9% was that function of math, just having a bigger denominator versus your costs. 'Cause costs excluding commissions were in about the same. Other than the other 40%, about a 1% delta related to a cumulative year-to-date incentive comp adjustment, an increase for the kind of year that we're having. If you normalize that would have only been 0.3% instead of 1% in the quarter. You know, it would have been about 10.2%. It's a lot more interesting to talk about the long-term run rate, because we're going to be cutting costs. You know, just in this view of having fewer starts until demand comes back more robustly, we're going to be looking to chop that number down. Lower is the answer. But that will lag. It will lag. It will always lag. As you know, we still have a bunch of homes to complete at this point. Okay. All right. I've got that. Jim, I have a question here, and you got to it at the very end of your prepared remarks, which is, obviously Green Brick was started at effectively the bottom of an awful housing market. We're looking at least some struggles in the near to intermediate term. When you're thinking about opportunities, are those opportunities that you think you'd see in your existing markets, so any opportunity to grow your share? Or is this the opportunity for Green Brick now to begin to spread its wings into new markets? I'd just like your perspective on that. Thanks. Okay, Carl. Well, first of all, we quit seeing much deal flow from brokers to sell builders because they knew we wouldn't buy based on rosy going-forward assumptions. You know, I'd like to say that we see a lot of deals, but frankly, we didn't because they knew that we weren't going to be buyers. Right now, you know, we are in a cyclical business. I think this is my fourth real estate cycle. I've never seen a real estate cycle where optimism didn't revert to realism. That's why I think that maybe, may is the operative word, be opportunities in 2023, purchasing a private builder for the first time, because I think you're going to see optimism revert to realism and pricing will adjust accordingly. The perfect scenario would be to find a private builder that fits our culture and more importantly, fits our economic hurdle rates in a South or Southeastern market. Great. I appreciate that color. Thanks very much. I'll get back in queue. We'll take our next question from Michael Rehaut with J.P. Morgan. Hi, everyone. It's Andrew Rossi on for Mike. I appreciate you taking my question. Congrats on the results this quarter. I wanted to ask if you can give us some of your thoughts around directionally how gross margins may be shaping up over the next one or two quarters. Sure. I think I'm gonna start that. Jed can chime in later as he tracks this almost on a daily basis, neighborhood by neighborhood. It's really interesting. In the A class infill neighborhoods, we're seeing margins maintained because it's so supply constrained from a competitive lot position and a builder's competitive situation. I don't wanna be overly optimistic, but we actually raised prices in a million-dollar neighborhood this week and are having really good demand even though at a slower sales pace in a triple A location neighborhood. The neighborhoods that are really hard to handicap right now are C location neighborhoods, and Jed's gonna chime in how most of our neighborhoods are not C location neighborhoods, but Trophy does have some. We think it's gonna be much more challenging because there's more builders down the street, housing is more commoditized. Frankly, what our gross margins are gonna be dependent to a great degree on what our peers do down the street. Your guess is really as good as mine. Yeah. I would just add that, you know, our gross margin and or gross margin will be affected by financing and increased realtor commissions that we're probably in these periphery markets all having to add to incentivize sales. Okay. Great. Thank you for that color. You mentioned raising prices in your triple A market. How should we be thinking about closing ASPs in the next two, three quarters ahead of you opening these new communities? Jed, why don't you take the product mix question? Because obviously, we're not raising prices in as many neighborhoods as either they're flat or decreasing. But I think our ASP will continue to increase slightly because what we've seen is the periphery locations that say we're selling 10-12 a month, sales have really dropped to about four.. That's quite a dramatic decrease, whereas the preponderance of our communities are in triple A locations, and we've seen a slight decrease. You know, maybe we're selling three a month instead of four. The percentage drop in the A locations, which again are the preponderance of our communities, is much smaller. The ASP in those communities is typically very high. Andrew, I think that probably some of the best color we gave was on just the increase in October of the average discount going from you know up to 6.3%. So that's gonna have an impact you know certainly on the ASP in part if it's a price discount and/or on incentives, so it becomes a little bit of a combination between gross margin hit and just right off the top for a discount. Okay, great. Yeah, super helpful to get your thoughts on that. I'll get back in the queue. Thank you. We'll take our next question from Jay McCanless with Wedbush. Yep. Hey, good afternoon, guys. Rick, I did not follow your answer to Carl on the SG&A question. Can Can you talk about why that was up year-over-year and what we should be forecasting going forward? Well, the bottom line is it's a function of lower revenues, and our cost structure is gonna have to come down. You know, it was probably 0.7 too high this quarter for the incentive comp adjustment. Otherwise, it's gonna be a function of us making adjustments to the core cost at probably the beginning of 2023. Okay. Jed, in your prepared comments. If I could just fill in, I wouldn't expect a big decrease in SG&A in 2004. We're gonna start addressing the cost structure more into 2023. We don't wanna have a knee-jerk reaction to that based upon three- or four-month sales, but we're watching very closely. Okay. Thank you, Jim. Then Jed, in your comments, I've caught about half of it. I think you said something about 20%-25% community growth. Is that what you said for next year? Yes. Yes. Okay. Does that community growth include the potential purchase of a southern builder you were talking about, Jim? Or is that definitely something that you already have under contract? We have no place cards for a builder, and we have some maps in our slide deck showing new community opening locations, Rick. Mm-hmm. I think investors really need to stay in tune with that map. In your presentation, what slide is that? Yeah, there are a couple slides in there, 15 and 16, but 14 is probably really on point because it shows how we have, you know, between this year and next year, 73 total communities, where we're delivering lot That's gonna drive the opening of those communities will be driving that growth in 2023. What's really interesting, we don't get this granular in our presentations, but if you take a look at the slide deck on 15, and you take a look where those communities are opening, you can see that they're in the areas that Burns describes as most desirable areas. I don't think any CEO is jumping up and down excited about what's happening in the market, but we're relatively optimistic because the communities that are opening in these new highly desirable neighborhoods, we have a very favorable lot cost. We purchased them when the land was low. Some of them have low cost MUD debt on them. We've already have other neighborhoods not far from that, and our lot cost in these new neighborhoods is very favorable compared to our older neighborhoods that are already producing very nice margins. We feel good about that. You'll see two dots or a few dots that are not in the highly desirable locations. As we said in the call, those are in more D.R. Horton, higher competitive neighborhoods where there's more competition, and we're gonna see margin compression in those neighborhoods, and we know it. We just don't know what it's gonna be because we know we can price a house more than D.R. Horton because frankly, it's a fresher architecture, more windows, better indoor-out living space, but the spread over a D.R. Horton product can only be so much. To that end, Jim, if this is a longer term downturn than shorter one, what's the future for Trophy Signature? Do you just put a lot of that land in mothball and wait till Jerome Powell's done jacking up rates? Or what's the near to medium term outlook for Trophy Signature? It's obviously gonna be harder to grow Trophy Signature unless you wanna take lower margins. We're gonna evaluate that. You know, we've already made the investment in land. So in terms of return on capital stuff, we think it's gonna be accretive. But how accretive? We don't know. In terms of Austin, for example, Jed, why don't you tell them what we're doing in Austin? We think we can still be very successful in Austin because we can price a home under $300,000, and we think there's a huge amount of demand. In this market, it's kind of a winner take all because the consumer is so smart. If you open at $300,000, and you can make decent margins, and some other builder's not far from you at $350,000, you don't get one incremental sale, you get 10 a month. Yeah. I would just add that, Jay, you know, our lot cost basis in a lot of these periphery locations is around $50,000. You know, we saw our vertical construction costs really kind of run out of control, not just us, but the whole industry to say, you know, where it's costing close to $200,000 a house to build. We think we can beat those down, you know, in the, you know, $150,000-$175,000 range and really deliver, as Jim pointed out, a much cheaper product at a you know, very industry standard, historically, nice gross margin of, you know, 25%-26%. Got it. Thank you for that, Jed and Jim. The last one I had, if infill is still selling that well, and on the company average, you had a 41% order decline, you know, I guess what was the level of declines in the softer areas versus the level of declines in the better areas for the quarter? Yeah. This is Jed. I'll take that. I don't have the exact numbers, but it was the cancellations in the A locations was, you know, at least half of what it was in the periphery locations. Right now, The real problem in the periphery locations is not demand. It was the cancellation factor that was so much higher. In the A locations, you know, we're taking $60,000-$70,000 in some of the higher end price points in lot deposits, and it's obviously there's those people are more qualified, and they're less likely to walk away from $65,000 than an entry-level buyers that puts $5,000 in a house. So our what was really affecting the sales pace, the demand was there. Our cancellations were too high. I think they were running 29%-30% at Trophy. You know, sometimes on some week, they can even be higher than that, and they're much lower than that for the aggregate of the rest of our builders. Okay, great. Thanks. That's my question. As a reminder, everyone, that is star one on your telephone to ask a question. We'll take our next question from Alex Rygiel with B. Riley Securities. Yes, good afternoon. First, a quick clarification. Did you say that incentives and cancellations increased in the month of October? Uh- Yes. Yes. Yeah. The incentives went from 4.2% in Q3 to 6.3% in October, for instance. Helpful. How many finished spec homes did you have at the end of the quarter? 63. Lastly, what's your land spend likely to be for 2022? We don't. I don't think we provide that detail. I think we were internally taking a look at land spend in 2022 and 2023, and I think it was gonna be, and Rick, was it about a $140 million dollar delta? Yeah, we're gonna be down 45% between land and development spend from 2022 to 2023. The delta on that is about $150 million. Thank you very much. That's somewhat fluid, depending on costs and other phasing issues that we're looking at right now. Obviously, with lower demand, any time that we can reduce development spend, that's a good idea, and we're really evaluating that on a neighborhood by neighborhood basis. All of our builders are coming to Dallas November 8th and 9th to discuss that issue with us. Thank you. We'll take our next question from Alex Barron with Housing Research Center. Yeah. Thank you very much. I wanted to see if you guys could provide the number of starts this quarter and how that compared to last quarter and last year? Yeah. It's actually that you can do the math pretty easily, 'cause every quarter we tell you what the closings are, obviously, and we tell you what the ending units under construction. In Q3, we started 490 homes. Okay. A year ago? A year ago was 801. It's very difficult. I would, I'd caution anybody to take a look at comparing COVID sales results and required starts that were resulting of that and matching that to other periods 'cause it's gonna skew your results. We just had, when we were starting 801, you know, we were selling homes. Really, in hindsight, that I wish we would've delayed selling some of them because of the cycle times. Right. My next question was, you know, with these new communities that you guys plan on opening and where you said that you have a cost advantage, does that imply that, you know, you will open them at lower prices than you would have otherwise, you know, to gain an advantage over other builders? Or do you plan. Well, first of all, the market sets the price. We don't set the price. We do know that you can hit a jet stream of buyers, offering a real value when you're in a peripheral neighborhood compared to peers. Our pricing strategy really is very dependent upon neighborhood location. In terms of opening some of these new neighborhoods, one of the things we're gonna be very cautious of is that we wanna get sales kicked off better, and we want to be able to raise prices and not have to worry about the impact of pricing on backlog. I think we can be more competitively priced, whereas in some existing neighborhoods that we had a large backlog, we frankly didn't want to jeopardize that backlog and get too aggressive on pricing when we only had, say, 20 homesites left in the neighborhood. Does that imply that most of these homes are gonna be specs that you sell very close to completion? Yes, because. Yeah, I think more and more specs. I think we had 65% level specs at the end of 3Q. I think you're gonna see that progress for two reasons. First of all, the buyer right now just doesn't wanna take the risk on interest rates. They wanna be able to, when they contract for a home, they wanna be able to move in in two months because they're concerned about rising interest rates, and then, you know, they're concerned just generally about jobs, costs, and a lot of other uncertainties that we weren't dealing with a year ago. Right. Okay. Well, that makes sense. Now, if I could ask one more. You know, some builders have said that they plan on maintaining a certain sales pace, let's say three or four a month, and that they're just gonna keep finding the market clearing price. I'm curious if you guys share that philosophy or if you look at the world from a different perspective. Well, it's gonna be interesting. In the A locations, we don't look at the world that way 'cause we don't have to. On the peripheral locations, as I said, you know, they said, "What's gonna happen to our gross margins?" When you say things like some peers are gonna maintain sales pace, obviously, if we wanna maintain sales pace, we're gonna be impacted by those guys 'cause we're down the street, so we're gonna have to see what they do. Got it. Okay. Well, best of luck. Thank you. Thanks, Alex. We'll take our next question from Carl Reichardt with BTIG. Thanks. Actually, Alex just got to the point I was trying to get to, which is, Jed, where on average are you releasing Trophy Signature Homes for sale in the construction process now? At slab pour. At slab pour. You've got another, what? That's four, five, six months to get to finished, yes? Is there a thinking- Yeah that you would do it later then, maybe at, you know, maybe at wrap or something like that in process? Well, the thing in reality is that most buyers, even though we release the slab pour, they don't want to buy a slab pour. Right. They want to buy after drywall and when carpet's getting ready to get put in. We're opening for sales, but we're not seeing the buyer interest at that level because they don't want to take the risk we just described. Jim, you're saying that will transition. Trophy will transition as you move into 2023 to releasing for sale deeper in the construction process, the vertical process? We just, we don't see a lot of buyer demand there. Frankly, you know, that buyer is putting up such small amount of earnest money at Trophy compared to our other builders that, yeah, for SEC and your reporting, we count it as a sale, but we watch it very closely because they have very little skin in the game. Okay. All right. Thanks very much. I appreciate that. We'll take our next question from Bill Dezellem with Tieton Capital. Thank you. That's Tieton Capital. You, I think, began to answer this question, but with input costs adjusting downwards, would you discuss the possible benefit to gross margin and maybe link that to the commentary before that if you had $200,000 of building costs, you think you can bring that down to $150,000-$175,000? Would that magnitude of a percentage drop in cost apply to higher priced homes also? I recognize there are several questions kind of embedded in that, but maybe you could talk to the whole input cost phenomenon. Bill, I'll try to address it. It's really an unusual situation this cycle compared to cycles, say, 20 years ago. We think labor costs as starts go down significantly, we think they could. They're going to react very quickly, okay? We think labor costs and the total cost of a home represent about 25% of the cost of a home. We think those costs are going to adjust fairly quickly. We're already seeing framers and concrete people interested in our business that really weren't a year ago. The side that's very difficult to evaluate on input costs is cement and some of the other large costs in our business. Unfortunately, in the last 20 years, you know, oligopolies have been created with lumber companies, cement companies, aggregates, and those things. Those guys are still very reluctant to lower prices. You know, we think firing up a cement plant is very expensive. When they see demand, they're not lowering prices right now. When they have less demand, we're still hopeful that we're going to see the impact of those next spring, but we haven't seen it yet. Yeah. I would add, we, you know, we've already realized huge lumber savings. A lot of the homes that we're now closing and that we will close, you know, in Q4 and Q1 are on very expensive lumber packs that were at the, you know, let's call it March, April of this year. You know, we've seen dramatic savings on those. Bill, when he's talking dramatically, we're talking about a 2,000-2,200 sq ft house, $20,000. Yeah savings. That creates a lot of volatility in these gross margins you're looking at too. That's insightful. The reference to bringing costs down $25,000 -$50,000, that was basically incorporating lumber and labor into the thought process, or were there other inputs? No, that was everything. I thought it was $175. Did you go to $150 on that conversation? No, I said $150-$175. Yeah. Okay. You know, Bill, we're hopeful we can get cement down. You know, concrete's at an all-time high. Like Jim mentioned, the concrete suppliers are not bending yet, but we're hopeful that we'll see some price decreases there. Lumber, you know, the mill lumber is way down. The specialty lumber is still high. We're hopeful we'll see some of that. The container shipping prices out of China that we're getting a lot of our flooring on, those were sky high. We're starting to see those drop. Hopefully, we see the fuel charges start evaporating. Home building is, you know, a collection of 1,000 line items to build a house, and if we start whittling them down, you know, 10%-20% per line item, we're going to see some really, you know, a totally different cost structure than these homes that we started back in March and April this year that are now closing over the next 30 to 120 days. Yeah. Prices go up quickly. They just go down slower. Then one additional question tied to this. Do you have an indication yet of the elasticity of demand that's in place in the market? Meaning that if you were to use those lower input costs to bring prices down, even though you might be maintaining margin, does that drive additional sales or is the buyer relatively inelastic at this point? Any insights? We're actually discovering that really and don't have a good answer. In some areas, we're seeing there's really price elasticity, where if we lower price $10,000, $15,000, we get demand. Again, in some of the perimeter neighborhoods, that $15,000 is not as important as the ability of that buyer to qualify. We're looking at rate buydowns and other things that are not price related, but I guess indirectly related to our margin at the end of the day in trying to provide a more affordable mortgage options for these buyers, 'cause that's more important to many buyers than price. Thanks for all the insight. We'll take a follow-up question from Jay McCanless with Wedbush. Hey, thanks for taking my follow-up. Two of them actually. The first one, if you think about the cost actions you talked about possibly starting in 2023, I guess, how are you gonna be able to take those type of cost actions but then grow the community count 20-25%? Could you talk about that, you know, in terms of where the staffing levels have to be to drive that level of community growth? Well, the community level growth is more of an indirect cost. A lot of those costs. Rick, you wanna chime in on that? Yeah, I mean, we've got capacity with a lot of our builders to man a couple of projects, perhaps. When you're starting a community up, you start with a fairly limited number of, you know, you're gonna build the model fast, try to get it open as fast as you can, and once it's open, you're starting your production, so there's a build-up over time. Transitioning from an old community to a new community or transitioning to, you know, modify the number of superintendents that you've got is certainly the cost related to our field overhead is gonna be variable over the next six-12 months just based on what we see from a sales standpoint, 'cause we're measuring our starts based on our sales pace. You know, a lot of that answer is yet to be discovered from you know what is the right you know headcount out in the field. It's a matter of moving pieces around the chessboard and making sure that we keep our strongest players on the team. You know, I'm not gonna quantify it for you because we're gonna have to discover this as we go. Okay. That 6.3% in incentives for October, and I apologize, I don't remember how you guys lined those out, but is all that gonna hit the gross margin or is some of that gonna show up in SG&A? No, it's all in gross margin. It's, you know, between price drops or, you know, closing cost incentives for buydowns, et cetera. The only thing that's gonna be below the line would be anything that we do with the brokerage community on promotions to them. Okay. Okay, great. Thanks again. Appreciate it. Sure. That concludes the question and answer session. I would like to turn the call back over to Jim Brickman for any additional or closing remarks. No, we would just invite anybody to give us a call in person if you have any questions. The market's challenging. It's not impossible. We've been through this before and we appreciate everybody's support. That concludes today's presentation. Thank you for your participation and you may now disconnect.