2 minute readCandor – the likes of which few other public homebuilding enterprise chief executives have the double-digit ownership, insider share leverage, and overall free-rein to express publicly – has become Ara Hovnanian’s signature.
Ara K. Hovnanian, chairman, president and ceo of Hovnanian Enterprises, Inc., accounts to institutional and individual shareholders in a way that stands apart from peers. That’s because his financial stake in the company runs deeper and higher than many of those peers. His exposure to both risks and rewards – skin in the game – gives him that free-rein to be straight with other investors and stakeholders.
Immersed as the nation’s economy is in what’s fittingly described as a cost-of-living crisis whose ultimate severity and duration remain locked in a Rosetta Stone of clues, constructs, and wildly speculative conjecture, plain speaking is hard to come by these days. Narratives and storytelling – as crucial as they are to deepening understanding and engagement with initiatives and efforts that matter – sometimes merely serve to eclipse the rub of reality rather than to reveal it.
Consumer households, their confidence levels, their income and expense levels, their family formations, and their lifestage change behaviors – as always — hold the keys to modeling any housing year ahead. Those keys are anybody’s guess right now.
Here’s a high-level on the latest from the University of Michigan Survey Of Consumers preliminary [For 28% of controlled lots optioned in 2022] some of those lots obviously were in the early stages just during due diligence so that we can actually walk away without even losing our deposit. So not all of those ’22 are even that amount at risk. But clearly, the lots that we controlled in ’22 are the riskiest land deals that we have. We’re not going to move forward and buy that. Even if we do have to risk the entire deposit to walk away, I’d rather do that than continue to invest money in it, to develop it and bring it to market if it doesn’t pencil what today’s home prices, construction costs, and sales pace. But if it doesn’t, as you mentioned, we’ll try to renegotiate and most sellers understand that the market really changed. Some are willing to alter term, some aren’t. So we don’t know how many of those ’22 will ultimately make it to the finish line or not. And the signature Ara Hovnanian candor comes in his final wrap up on the call. There are great things about our quarter and things we’re not so happy about, particularly regarding new contracts. But we’ve been down this road before.On Land Option Walk-Aways
Larry Sorsby
![Source: Hovnanian Enterprises On Land Option Walk-Aways Larry Sorsby [For 28% of controlled lots optioned in 2022] some of those lots obviously were in the early stages just during due diligence so that we can actually walk away without even losing our deposit. So not all of those ’22 are even that amount at risk. But clearly, the lots that we controlled in ’22 are the riskiest land deals that we have. We’re not going to move forward and buy that. Even if we do have to risk the entire deposit to walk away, I’d rather do that than continue to invest money in it, to develop it and bring it to market if it doesn’t pencil what today’s home prices, construction costs, and sales pace. But if it doesn’t, as you mentioned, we’ll try to renegotiate and most sellers understand that the market really changed. Some are willing to alter term, some aren’t. So we don’t know how many of those ’22 will ultimately make it to the finish line or not. And the signature Ara Hovnanian candor comes in his final wrap up on the call. There are great things about our quarter and things we’re not so happy about, particularly regarding new contracts. But we’ve been down this road before. Related](https://develop.housingwire.com/wp-content/uploads/2022/12/Screen-Shot-2022-12-09-at-1.27.43-PM.png 1280w){kind=link}