With sales in the home market continually dropping, Hovnanian Enterprises Inc. has launched a three-day nationwide sale on all its properties starting today (Friday), and is calling it the "deal of the century."
Some of the incentives include plasma TVs, huge price cuts, upgrading appliances, $5,000 toward savings costs, etc. A lot depends on the particular market being served. Incentives differ from market to market.
Some of the bigger deals are in the California and New York, where builders are dropping prices by $100,000 or more for the weekend.
Ara Hovnanian, the company’s president and chief executive, gave the reason for the initiative: “Credit tightening in the mortgage market has reduced the number of qualified homebuyers, existing-home inventory levels remain persistently high in many of our markets, and buyer psychology has been negatively impacted by a steady stream of news related to falling housing prices, foreclosure rates and mortgage availability."
Last week, Hovnanian reported a third-quarter loss of $77.9 million. Last year the company had a net income of $74.4 million.
Some say this is a desperation move by the company, but I don't think that's the case. When sales slow down, a strategy always used to move goods is to slash prices or offer incentives. It's done all the time.
For the housing market, Hovnanian believes it won't recover until 2009.
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