Last week I posted on Hovnanian Enterprises (NYSE:HOV) and their "Deal of the Century." Hovnanian Enterprises has announced that their 3 day firesale on luxury homes was "phenomenally successful" in the words of a PR official at Hovnanian in the Northeast region.
Over the course of the three-day event Hovnanian reports that it had more than 2,100 gross sales, including 1,700 contracts and more than 400 sales deposits. The company also reported a seven-fold increase in the amount of traffic to their website. Ara Hovnanian CEO of HOV said "The preliminary results from our 'Deal of the Century' sales promotion exceeded our expectations."
The successes of Hovnanian are already getting other homebuilders attention. Standard Pacific Corporation (NYSE:SPF) has already started a sale in California which is being similarly marketed.
Monday, Thestreet.com reporter Nicholas Yulico raised an interesting question, will Hovnanian's move spark a pricing war which will end up hurting the industry as a whole? Sure the cash flows that HOV will receive are great for the short-term, but what about the long-term health of the industry? It will be interesting to watch this unfold.
I want to know what readers think. Do you believe these firesales will end up helping or hurting the industry?
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