Home builder Hovnanian Enterprises is focused on reducing its inventory of unsold homes, after a national weekend sales promotion exceeded expectations, Chief Executive Officer Ara Hovnanian said on Tuesday.
"There are interested buyers in the marketplace, much more so than (in) prior housing downturns," Hovnanian told the Credit Suisse Homebuilder Conference.
The company's "Deal of the Century" promotion last weekend generated 10 times the usual sales volumes, which justified the discounts and incentives of up to $100,000 per home, he said.
"We are focusing now more than ever on reducing our inventory levels," Hovnanian said.
The CEO also said the subprime mortgage market, which caters to home buyers with weaker credit, "is virtually gone," while Alt-A mortgages -- for those with slightly better credit -- are diminished but still available.
Hovnanian said public builders were quick to lower prices and cut back on construction, while working to reduce their costs.
"Large builders continue to take market share," he said.
The U.S. economy is healthier and mortgage rates are lower than in past housing downturns, he added, so a recovery may be quick once it gets going.
"We are seeing a more rapid descent more similar to what we saw in 1975 and 1981," he said. "Hopefully, it will be rapid in duration, as well, and we'll see (a similar) recovery."
The company has all the credit it needs, he added.
"While we're always concerned about credit availability, it is not an issue at this time," Hovnanian said.
Shares of Hovnanian rose 23 cents, or 2.0%, at $11.56 in early trading on the New York Stock Exchange.