Operator
Our next question is coming from Nishu Sood of Deutsche Bank. Your line is open.
Nishu Sood – Deutsche Bank
Thanks. First question I wanted to ask was the California Tax Credit has created a preference for specs clearly because the credit can only be applied for at the time of closing. So that probably has had helped you folks perhaps more than others because your skilled in handling specs. I wanted to ask your perspective on what you are seeing in other parts of the country. In other words during the spring season, did the low rates that the sense they were not heading into a Great Depression, did it also create a similar kind of urgency, preference for specs in other parts of the country.
Stuart A. Miller
A preference for specs. I am not ignoring any issue. I am trying to go through in my mind specifically what I heard in the field. I think it’s a mixed bag and I don’t know that it arrives exactly from the low interest rates or the tax credit or what not. I think in some markets we are seeing a greater propensity for people to be looking for something with a nearer term delivery because we are competing so directly against foreclosures and I think this goes across the industry. I think it’s why you are seeing new homes sales come down so dramatically. That 340,000 figure yesterday was -- that’s really life and I know that there are calls that people are saying that boy, we hope that no new homes are delivered but I think that’s pretty dramatic.
I think that the competition against foreclosures that are there available, ready to go is what’s driving that orientation towards, in some instances more of a desire to have specs on the ground. Now I would say that that’s more of a local phenomenon because when you are looking at foreclosures, not all foreclosures are generic or the same, many of them are in the intercity, many of them way are in the outlying areas, some of them are in total disrepair to the extent that a community in which we are building is desirable.
We don’t have to have specs on the ground or under construction in order to compete at all. So I think it’s a local market assessment that answers that question.
Nishu Sood – Deutsche Bank
Got it. I guess I know the debate about specs versus to be built preference, in a downturn is a debate that is always raging. I was specifically thinking about during the spring because your experience relative to the other builders who are let’s say more fixated on the to be built might give us a sense of whether or not the signs of stabilization or whatever you might call them are just capitalizing on a near term pulling forward of demand or as you were describing it might be the beginning of something more sustainable.
Stuart A. Miller
Well, first of all, I hope I haven’t come across as saying that I think I am seeing more sustainable. The one thing that I feel might be sustainable is I think that the mentality of the country has gotten out of this complete negative downward spiral mentality but that doesn’t completely offset the higher interest rates but more foreclosures, gas prices going up, unemployment going up. So there are a lot of headwinds out there.
I don’t think there’s an answer to your question. I think that we are going to have a bumpy road where there are going to be choppy data points that convince us one day that there is more downside and the next day we are stabilizing and I think we have to be prepared for the fact that we are not going to get a clear shot from Lennar from the other builders or from the market itself and there’s just going to be a bumpy group of data points to find where we are going for the time being.
Nishu Sood – Deutsche Bank
Got it, great and a very quick cash flow question. Did the quarter include prepayment for $140 million recap of land sources?
Bruce E. Gross
No, that would be a third quarter transaction would be our expectation if it gets approved.
Nishu Sood – Deutsche Bank
Okay, thanks a lot.
Operator
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