How would you like to have purchased a home in this development last year and wake up to this in the morning paper. Hovnanian is a major US builder, certainly in the top ten. This type of 'inventory clearance' is practically unheard of among major builder/developers because of its negative impact on people who have recently purchased. Who in their right mind would ever buy in another new development in which Hovnanian was involved? He's sure creating some less than happy little communities. Most residential real estate downturns involve the bankruptcy of at least one major builder. None have gone under in this downturn to date but I've got a new favorite in the race to Chapter 11.
As an aside - Hovnanian is offering the sleeves from his vest to people biting on the "Deal of a Century". Hard construction cost on that model identified did not exceed $215,000 and the developed lot hard cost was less than $75,000. He's eating soft costs and holding costs and that's it.
It appears that Countrywide has secured another $12 billion before next weeks Fed meeting and mortgage originations are up a few ticks while rates have dropped. We're two weeks into The Great 2007 Walk Away and so far, so good.
'Course, that's what the fella who jumped off a twenty story building said as he passed the tenth floor.