- FDIC's Bair Cautions on Risks in Bank Break-Up Plan
- Wednesday's Economic News Crunch Could Tilt Markets
- Call Me Crazy: Confessions of a Black Friday Shopper
- US Firms Hit by Payroll Taxes at Exactly the Wrong Time
- Citi Mortgage Reveals Something the US Treasury Won't
- Fed Sanguine About US Recovery, Worried on Jobs
- Amended Berkshire Filing Reveals No 'Secret' Holdings
- Holiday Guide to This Season's Smartphones
- In Time for Holidays: More Gloom and Doom on Economy
- Citi Mortgage Reveals What Treasury Won't
- S&P to Hit 1,200 by Year-End: Chief Investor
- Amended Berkshire Hathaway Filing Indicates No Secret Stock Stakes at End of Q3
- Facebook's Biggest-Ever Holiday Shopping Season
- Facebook's New Dual Class Structure - Slow Steps to an IPO
- 5 Big Bank Stocks Investors Should Consider: Strategists
- Gambling Drunk, Texting to Live And America's On Sale - Your Emails
- Nov. 24: Unusual Volume Leaders
- NBA D-League On The Rise
MOST SHARED
- The 'Real' Jobless Rate: 17.5% Of Workers Are Unemployed
- Wednesday's Economic News Crunch Could Tilt Markets
- NBA D-League On The Rise
- Trading Block
- Australia Wheat Exporters Face Challenges: GrainCorp
- Japan Export Rebound Eases Fear of New Recession
- Ron Paul's Plan to Audit Fed a 'Serious Attack': Mishkin
- The Social Media Gaming Threat
- Australia's Economy Upswing to Last Years: Central Banker
- Cramer’s Christmas List
Text Size 
It has been a very tough year for homebuilders, and no one knows that better than Ara Hovnanian. His company, Hovnanian Enterprises [HOV
Loading...
()
], saw its stock plummet from $40 in February to just below $6 a share today.
Despite the industry’s downturn, Hovnanian maintains a positive outlook and sums this up to the cyclical nature of the homebuilding industry.
“Housing is down; it’s going to come back,” said Hovnanian. “There has been a major correction already. We’re certainly near the bottom, that would be my guess.”
One thing that is giving Hovnanian confidence is the surprisingly strong December he said the industry had.
_________________________________________
For Hovnanian Investors:
-Performance vs. Industry Peers _________________________________________
“The Fed indicated they might change their stance on rates, Secretary Paulson indicated their rescue plan for the subprime resets, and all of the sudden sentiment changed. We had a fabulous December, very unusual, it’s usually a slow time in the marketplace.”
Skeptics are calling for a 15% drop in the median value of homes before we see a bottom in the industry, but Hovnanian says there has been more of a correction than some might think.
“A lot of the house prices they quote have to do with existing prices. New homes have corrected dramatically more than existing homes, so that’s already happened.”
Hovnanian says by the end of February we should see data that accurately reflects the correction the industry has already had.
Solutions
Hovnanian says freezing mortgage resets for homeowners who can afford the pre-reset price will stabilize the market and forestall foreclosures, but he would also like to see the Federal Reserve take more decisive action by further cutting interest rates.
“ I think 50 (basis points) would be key,” said Hovnanian. “I think it’s going to take even more than that, but that would be a great move for confidence.”
Print
Email
- Remember when auto shows were major events where new models could generate buzz?
- CNBC’s Mike Huckman visits a cutting-edge plant to see how the flu vaccine of the future is being made.
- People who bottle up their anger at work are up to five times more likely to suffer a heart attack, a study found.
- Playboy will outsource its publishing operations in a bid to become profitable again.
- A new McDonald's in Manhattan is the nation's first to sport a sleek, chic interior imported from stores in London and Paris.
- For nearly three decades, these on-call experts have been dishing advice on how to – and not to – cook turkey.
Data is a real-time snapshot *Data is delayed at least 15 minutes