Hovnanian Enterprises Inc. (NYSE:HOV) is running a major promotion this weekend in order to try to fuel its home sales which are in a huge slump. The company is calling this promotion the "Deal of the Century" sale. It seems like so long ago now, but just a few short years ago, Hovnanian and its competitors like DR Horton Inc (NYSE:DHI) and KB Home (NYSE:KBH) could practically set any price on 
their homes, and they would still sell like hotcakes.
Now, this "Deal of the Century" at Hovnanian is going to reduce the prices of some of their homes by up to a stunning and unprecedented 25%. The sale covers 19 states, and begins 9 a.m. Friday morning and ends 9 p.m. Sunday night.
Reducing the price of some of their New Jersey homes by $200,000 or more for one weekend is an absolute last-ditch effort by Hovnanian to try to perk up sales. On the surface this appears to be a crazy move that will kill the bottom line, but in this case I cannot blame the company. They simply have to try to do everything possible to jumpstart their sales at this point. In New Jersey, the inventory of unsold homes soared to 72,000 in June from a level of just 39,000 as recently as two years ago.
How will homebuyers react to this sale? Will it prove effective or fall flat on its face? I know Hovnanian's competitors will be watching very closely.
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Tracked on: September 18, 2007 8:00 PM | Permalink to Trackback