Hovnanian Enterprises, the nation's sixth-largest homebuilder based on revenue, holding a three-day sale starting today that they expect to boost revenue in the company's slowest markets, including California and Florida. The deal has been dubbed "The Deal of the Century", according to the website, khov.com.
The builder, based in Red Bank, New Jersey, hopes to sell 1,000 homes this weekend. The company's sale will be held in 18 states including California, New Jersey, New York, Arizona, Ohio and Illinois. Hovnanian is offering discounts of up to almost $150,000 on homes.
Hovnanian Enterprises Inc. Chief Executive Officer Ara Hovnanian said the U.S. housing market is near the bottom and will not recover until 2009. The shares rose as much as 9.6 percent.
New home sales have fallen 37 percent from their peak two years ago as buyers back out of contracts, wait for prices to decline further or find mortgages difficult to secure. Hovnanian's stock has lost almost three-quarters of its value this year on concern the two-year-old housing decline may extend into next year.
Hovnanian shares rose 81 cents to $10.84 at 2:01 p.m. in New York Stock Exchange composite trading. The stock is down 70 percent this year as of yesterday.
Hovnanian shares have dropped to the lowest since 2001 and the builder has reported four consecutive quarters of losses. The company has vowed to generate $175 million to $250 million of cash flow in the fiscal quarter ending in October.
Hovnanian's net loss for the fiscal third quarter was $77.9 million, or $1.27 a share. Revenue slid 27 percent to $1.13 billion as a third of buyers canceled contracts.
Hovnanian has been building houses since 1959 and is now New Jersey's biggest builder.
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