Both the Asbury Park Press and the Record of Hackensack have interviews today with Ara Hovnanian, scion and CEO of Hovnanian Enterprises, the Fortune 500 homebuilder headquartered in Red Bank.
On the table in each is the state of the real estate market and the outlook for a turnaround at HOV, which has posted two consecutive quarters of losses and forecasts a third.
From the Press interview, conducted by business writer David P. Willis:
“We’ve seen and weathered and experienced many housing market slowdowns and this is yet one more notch in our quiver of experiences,” [Hovnanian] said. “And it is not uncommon and not to be unexpected to have periods where our profitability not only is less, but in some cases like the last two quarters, where we have the losses.”
The interview covers Hovnanian’s read on the underlying causes of the downturn, the impact of problems in the subprime mortgage market, and the adjustments Hovnanian has had to make to entice new-home buyers.
The interview concludes with this:
Q: How will the company do going forward?
A: First, it is important to remember we’ve been in business for almost 50 years.
Fortunately, because we’ve experienced this before, we know to have a rock-solid financial foundation. And we’ve got a strong balance sheet to weather this. It is one of the important things. The company has about $2 billion in equity, which is primarily from all the profits that we’ve made since our inception and reinvested back into the company.
The Press feature also includes (online, of course) audio of the interview.
The Record interview by Kathleen Lynn touches on HOV’s decision to move its HQ last year from the Middletown side of the Cooper Bridge to downtown Red Bank, at the corner of Maple Avenue and West Front Street:
Q. Why did you put your new headquarters here in downtown Red Bank? And could you talk a little bit about your urban redevelopment projects?
We started doing urban redevelopment almost 20 years ago, starting in downtown Newark and Jersey City.
We really started it feeling it was something we were obligated morally to do. We felt like the urban areas were decaying. We felt there would be an opportunity as well; it didn’t all have to be charitable, even though we were prepared to do it at very low [profit] margins to get things started, to give back. Our first one was one of the most challenging. It was in downtown Newark, in the middle of where they had the race riots.
As we had success, it slowly developed into a legitimate business line for our company, not just something we thought was the right thing to do.
The demand for that kind of product is rising. Not everybody wants to be out in the suburbs on a quarter-acre lot with a white picket fence. There’s a younger generation and a different generation that wants to be in the thick of things. We wanted to take a lead role in that ourselves, with establishment of our headquarters here, and make a further statement about our devotion to redevelopment.
