Lawler on Hovnanian: Home Sales Soft without “Big Deals”

From housing economist Tom Lawler:

Hovnanian Enterprises, the 7th largest US home builder in 2013, reported that net home orders, including unconsolidated joint ventures, totaled 1,907 in the quarter ending April 30, 2014, down 2.2% from the comparable quarter of 2013. Sales per community were down 8.5% from a year ago. The average net order price last quarter was $368,668, up 3.3% from a year ago. Home deliveries last quarter including JVs) totaled 1,331 last quarter, down 6.5% from the comparable quarter of 2013, at an average sales price of $354,405, up 4.3% from a year ago. The company’s order backlog at the end of April was 3,032, up 7.3% from last April, at an average order price of $374,584, up 3.4% from a year ago.

Here is an excerpt from the company’s press release.

"We launched our national sales campaign, Big Deal Days, in March and were encouraged by the 728 net contracts signed during the month of March 2014, the highest level of monthly net contracts since April 2008. In addition, the 3.6 net contracts per active selling community in March was the highest level of monthly net contracts per community since September 2007," stated Ara K. Hovnanian, Chairman of the Board, President and Chief Executive Officer. "However, our sales pace during April and May was choppy and the total monthly sales pace per active selling community in both months fell short of last year's levels."

Hovnanian’s “Big Deal Days” campaign, which offered “the biggest savings of the year” on a selection of “quick move-in” homes, ended at the end of March.

In the company’s conference call presentation Hovnanian broke out net orders by month, and included net orders for May. Net orders for April and May combined were down 12.4% from net orders in April and May of 2013.

Hovnanian owned or controlled 37,787 lots (including JVs) at the end of April, up 25.8% from last April.