| Type | Public (NYSE: HOV) |
|---|---|
| Industry | Construction |
| Founded | 1959 |
| Headquarters | Red Bank, New Jersey, United States |
| Key people | Kevork Hovnanian Founder & Chairman Ara K. Hovnanian CEO & President J. Larry Sorsby CFO & Executive VP |
| Products | Homes Financial Services |
| Revenue | US$ 1.596 billion (2009)[1] |
| Operating income | US$ -672.02 million (2009)[1] |
| Net income | US$ -716.71 million (2009)[1] |
| Total assets | US$ 2.03 billion (2009)[1] |
| Total equity | US$ -349.60 million (2009)[1] |
| Employees | 1,750 (2009)[1] |
| Website | www.khov.com |
Hovnanian Enterprises, Inc. (NYSE: HOV) is a United States real estate company involved in every aspect of marketing homes, including design, construction and sales. The company works with individual detached housing as well as higher-occupancy dwellings, including townhouses, condominiums and retirement homes. In most cases, the company acquires and develops the land on which these developments are built, but in some geographic regions, Hovnanian offers to build their proprietary house designs on private land. The company consists of two operating groups, homebuilding and financial services, and recently entered the Fortune 500.
Despite some recent financial difficulties due to the 2008–2009 recession and financial crisis, Hovnanian Enterprises remains the sixth largest American homebuilder and the largest homebuilder in New Jersey, as of September 2009.[2]
Contents |
Hovnanian Enterprises, Inc. builds about 14,600 houses a year, with base prices ranging from $46,000 to $2,350,000 and averaging about $280,000. It operates in Arizona, California, Delaware, Florida, Georgia, Illinois, Kentucky, Maryland, Michigan, Minnesota, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Texas, Virginia, and West Virginia.[3] The Hovnanian family controls about 30% of the company shares, a stake worth $1 billion in 2005.
The company relocated its corporate headquarters to a new building on the banks of the Navesink River in Red Bank, New Jersey, in 2006.[2]
In 1959, Kevork Hovnanian, an ethnic Armenian originally from Iraq, and his three brothers - Hirair Hovnanian, Jirair Hovnanian and Vahak Hovananian - each contributed $1,000 dollars, in addition to $20,000 which they borrowed, to found Hovnanian Enterprises, Inc. in a trailer in Toms River, New Jersey.[4]
Hovnanian and his company earned a reputation to selling low cost condos and townhouses, many to first time young homewowners and families.[4] A typical two-bedroom, two bathroom Hovnanian home built in the early 1980s cost approximately $30,000 because Hovnanian eliminated amenities such as communal swimming pools, which other builders used to attract potential buyers.[4] In a New York Times interview in 1983, Hovnanian explained his reasoning for marketing low cost homes in developments without community amenities, "There are limited recreation facilities going in because people have little time for socialization."[4]
In 1964 Jirair Hovnanian split off from his brothers' company and founded his own construction business, J.S. Hovnanian & Sons, of Mount Laurel Township, New Jersey.[5] Hirair and Vahak also left the company by 1969 to found their own enterprises.[4]
Hovnanian Enterprises had built and sold more than 30,000 homes and condos by 1989.[4] An additional 200,000 residences were sold between 1989 and 2009, as the company expanded its construction to include luxury homes, mid-priced homes and retirement communities.[4] It remains one the United States' largest builders of "active adult homes", which are sold under the name of Four Seasons communities.[2]
Kevork Hovnanian stepped down as president of Hovnanian Enterprises in 1989, and was succeeded by his son, Ara K. Hovnanian.[4] He remained chief executive until his retirement in 1997, and was also replaced as CEO by Ara Hovnanian.[4] However, he remained the chairman of the company's board of directors until his death in 2009.[4]
Hovnanian has been the subject of customer complaints. In a few cases, there have been legitimate construction problems in some Hovnanian houses. For example, in 2005, Hovnanian acknowledged problems in a development in New Jersey after nearly three dozen disgruntled homeowners turned to elected officials when their complaints were ignored.[6]
K. Hovnanian Homes has also been the subject of praise from homeowners citing the builders reputation and solid history.[7] Hovnanian has also received numerous awards based on the quality of their construction and high level customer support.[8][9]