Folks, when you pay $85,000 and sell for $20,000 two years later, that's an epic, historic, mind-blowing meltdown.
And makes you wonder, after falling 75%, can it fall even farther? Big message is don't buy real estate for 10% off or 40% off. We're going to see firesale pricing that'll make your head spin. 75% off. Wow.
Geesh. This is amazing.
The following is a transcript from today's HOV conference call:
Stephen S. Kim - Citigroup Smith Barney
That’s what I thought. Could you give us a sense, or maybe what magnitude it was lower than what you had initially paid?
Ara K. Hovnanian
Well, we did not buy all of that land in one transaction. These are, if you remember, scattered lots in that area so they were literally bought in small increments on a regular basis.
To give you an idea on how significantly that market corrected, at the peak lot transactions happened in one of the areas at about $80,000 a piece.
The market continued to come all the way down. We wrote it down, and not all of ours, by the way, was purchased at $85,000 but that was where it was at the peak.
We wrote down the values to the low 20s, and I think the contract amount off the top of my head came in just slightly below that level.
Stephen S. Kim - Citigroup Smith Barney
Thank you. That’s what I was looking for. Thanks a lot.
