Hovnanian Spurs Home Sales
With Price Cuts of Up to 30%
A 72-hour promotion by Hovnanian Enterprises Inc. designed to jump-start sagging home sales exceeded the company's expectations, resulting in more than 2,100 gross sales, the homebuilder said.
The figure included more than 1,700 contracts and more than 400 sales deposits. In its fiscal third quarter ended July 31, Hovnanian recorded 2,539 signed contracts, excluding unconsolidated joint ventures.
President and Chief Executive Ara K. Hovnanian had said before the sale started that he'd be "thrilled" to sell 700 or 800 homes.
"The high level of traffic we saw in our sales offices and models over the weekend and over the past several weeks convinces us that there are interested buyers in the market today," Mr. Hovnanian said.
"However, with all of the negative publicity about the housing market, many homebuyers were hesitant to buy because they worried that even lower prices might be offered later," he said.
The "Deal of the Century" promotion which ran from Friday through Sunday promised "unprecedented savings" nationwide, largely on unsold homes that were completed or under construction. The best deals available were on the roughly 2,000 homes already started, Mr. Hovnanian told Dow Jones Newswires last week.
On certain New Jersey and New York properties, buyers could save up to $149,600, Mr. Hovnanian said. Borrowers, however, had to use the Red Bank, N.J., company's lender and it was unclear which homes got that discount.
In afternoon trading, Hovnanian shares were up 2.7%, or 29 cents, at $11.29.
Industry experts said the weekend could show if price specials are what it will take to get jittery buyers to sign the dotted line.
At the height of a boom fueled by low interest and generous credit terms, builders profited from bidding wars. But, now, as a credit and mortgage crisis sweeps the nation, foreclosure counts are skyrocketing and lenders are either closing or tightening their requirements. That's left home builders battling ballooning inventory and cancellation rates.
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