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Hovnanian: We Can’t Build Homes Fast Enough

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    Hovnanian Enterprises CEO Ara Hovnanian discusses why he is raising prices of his homes.

  • Duration 4:41
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There is feeling a real impact of a housing recovery will Robert just showed you one example but one of the biggest names in the space is Ara Hovnanian.

Hovnanian Enterprises chairman and CEO he's right here at fox has this exclusive of that let's specifically speak to what Robert was just talk about the California market.

-- did this switch flipped to -- -- from off it it was gradually on for the last year but in the last few months it's just.

Gone on -- ill -- to Eric say the last three months we've been raising prices pretty steadily particularly northern California.

But were feeling a very good market took what's tell you a trip is that because the unemployment rate is still relatively high.

Is it sentiment what -- It's a combination of many many things people of held off the purchasing decision that's number one.

Number two mortgage rates are ridiculously low so the monthly payments are so affordable right now.

And you combine that with good prices by historical standards its.

The good operatives a little stunning to see that the Dow Jones home construction index has tripled since October of 2011.

Obviously we know was from a very low base but.

Give us some anecdotal evidence.

What is the amount of time between you saying okay we have -- Hovnanian home that is finished it's now on the market to what a post contract.

You know it varies all over in some places we -- it most cases actually we sell it before we build the house so.

Really what's key is velocity sales per location.

That has been increasing dramatically and -- actually almost trying to slow it down in locations by.

Raising the glasses while it's difficult to keep up the -- number one it's hard to replace the land and land prices are going up because home prices are going up.

And number two.

We can't build them fast enough -- some quick cases so we're better off raising the prices it let prices putting its slowdown in giving us.

And to catch up.

Back during that the housing bubble.

IQ built and I know 'cause it was down the street in Edgewater New Jersey or closer -- -- -- Hovnanian community counts -- building one possibly in west.

New York yes we're about to start -- -- we have put -- and land on the back burner for a while while the market was slow prices have gone up so much particularly right in long that Gold Coast.

-- New York but it's not exactly but it get -- it you're now looking for neighborhoods like what's interest Michelle -- nomad on the rise not necessarily the -- -- the F water but moving its way up.

Right there but what's New York is half the price of what we saw -- nomad.

On the segment a moment ago so that's what's making people go over the -- ferry over so.

That's.

It's been strong how.

Deeper breaths to or how deep and exhaled did you finally -- things started to look better because it was tough for her name is still only a five dollar stock at this point well loft.

The -- -- the past decade.

Absolutely has been a long road a -- really sort of slowdown in September of -- -- so it's been a long painful journey.

But -- like to say about January.

Of twelve.

Things really started to turn and it's now gaining even more moment want to.

The big areas that seems to be hotter the the so called active adult housing complexes and areas Florida would be huge to and they -- -- -- pull back what you've seen in the Florida region.

Florida is absolutely pot not just active adult although we do that as well but we're building an Orlando Tampa and Palm Beach County all three are really strong this year.

That's an amazing comeback because Florida California.

-- of the world they have really suffered -- what did you learn from going through these horrible times of course your father has had started the business and and you -- YouTube really look back at at the times that he went through that were difficult than this one probably -- among the highest where he might have thought at certain points can we can be really make it.

-- -- -- The leadership names sometimes fail more quickly than -- -- and commerce because they get comfortable you know how could you survive that.

Slow as you -- my late father sort of the company 55 years ago so we've been through a lot of recessions this what is clearly be to do reasonable recessions.

Fortunately we were not dependent on bank debt year old long term financing.

It gave us a lot of opportunity we have a great name in the bond -- -- we are able to issue new debt with longer maturities.

And we've been through this playbook we were aggressive when the market was really low in the last two years.

We've been buying land and that land is yielding some good result there's here.

-- -- Speaking ghetto greedy when others are fearful if you can't be great to see you -- could -- Ara Hovnanian and a Fox Business exclusive market still up will be bright backs.

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