Today’s Star-Ledger reports that Red Bank-based homebuilding giant Hovnanian Enterprises is cutting prices and offering incentives worth up to $240,000 on unsold new homes, discounts that industry experts call unprecedented.
From the story, by business reporter Joe Perone:
Just a few years ago, Hovnanian Enterprises held lotteries to sell new homes because demand for housing was white-picket-fence hot.
Now, with the residential real estate slump deepening by the month, the largest New Jersey-based homebuilder is holding a fire sale at developments across the country. Prices this weekend will be slashed by up to six figures $100,000, $149,000, in some cases $240,000.
It’s a sign of just how far the housing market has fallen from the boom years and just how desperate homebuilders such as Hovnanian are to move inventory.
“Crazy Eddie is back in the real estate business,” said Keith Gumbinger, vice president of HSH Associates, a consumer research firm in Pompton Plains. “Folks who are sitting on the fence right now are waiting for a reason to buy.”
Other developers have offered rich incentives, from cars to vacations, to entice buyers during the market’s downturn. But housing industry experts say the discounts being offered by Hovnanian are unprecedented.
One homebuilder, Lennar, slapped huge discounts on some of its homes late last year, according to Jeffrey Otteau, president of the Otteau Valuation Group, an East Brunswick real-estate consulting firm. “Other than that, I don’t remember anything on this scale,” he said.
Hovnanian, based in Red Bank, says it expects hundreds of home buyers to crowd its developments this weekend throughout New Jersey. The so-called “Deal of the Century” sale, which covers 19 states, begins at 9 a.m. Friday and ends Sunday at 9 p.m.
“Our competitors have done this only with some degree of consistency,” said Michael Skea, vice president of marketing and sales for K. Hovnanian Homes-Northeast in Edison. “The long and short of it is that folks are looking for homes that are right-priced. Some people will perceive this as a fire sale, but we do not.”
The Ledger says the price cuts will be offered at 17 Hovnanian developments in New Jersey, with details available at the developer’s website.