Hovnanian: Housing Market Has Bottomed

| Sep 15, 2007 | Comments 3

It was only a matter of time before another Homebuilder CEO would claim that the housing market had bottomed.  Ara Hovnanian,  CEO Hovnanian Enterprises, put his stake in the ground on yesterday 9/14/07 per Bloomberg.  Apparently he learned from Robert Toll’s pronouncement in March.  He added a caveat to his claim, “The bottom is very near but I think it’s going to stay along the bottom for a while before a recovery.”   

If the bottom is in why is Hovanian having a fire sale this weekend or as they are dubbing it the “Deal of the Century.”  The company is offering discounts of up to almost $150,000 on homes.

If there is one thing that I have learned from the stock market - it is that picking bottoms is a losing proposition.   Matter of fact, I will pass on the first 15-20% off the bottom.  The bottom can only be identified in hindsight.  In other words, the bottom is in when Homebuilders start raising prices not having fire sales.

Filed Under: Real Estate

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  • charactor

    I believe Ara called a (near) bottom and slashed prices to entice buyers into the market and reduce the inventory overhang. But in fairness to him, he stated that the bottom is very near but will stay along the bottom for a while before a recovery. His business is 50 years old and I believe he knows whereof he speaks. I believe other homebuilders will follow his lead. Finally, I think you have a fire sale when you are at or near a bottom, as he has done, and raise prices during a recovery. On his bold fire sale, I got long HOV.

  • http://www.thetimeandmoneygroup.com miked

    All I can say is good luck. I wouldn’t put $1 in homebuilding stocks.

  • http://moneyshaker.blogspot.com Adventures In Money Making

    several bldrs have been have “deals of the century”.

    http://moneyshaker.blogspot.com/2007/09/homes-for-everyday-heroes.html

    here in san diego, standard pacific is knocking off $100k plus they’re giving away a ton of upgrades.

    there a small bldr who built 12 homes in asmall infil project whre i live. they have been unable to sell the last 2 home for over a year now!