Hovnanian Buys Housing Lots in Phoenix for $31.5 Million
Hovnanian Enterprises Inc. (HOV), New Jersey’s largest homebuilder, bought 490 lots near Phoenix for $31.5 million, a sign of the new-home revival in one of the U.S. markets hit hardest by the housing collapse.
Hovnanian closed the purchase on the finished and unfinished lots in two tracts northwest of Phoenix yesterday, according to Mark Weber, Arizona division president of the Red Bank, New Jersey-based company.
“We have been aggressively pursuing finished lot and platted lot opportunities in the Phoenix market,” Weber said in an e-mail.
Builders in the Phoenix area are rushing to acquire more land as demand for new homes revives amid falling unemployment and a shrinking supply of distressed houses.
Phoenix home prices have risen 12 percent since September, after falling 56 percent from a June 2006 peak, according to the S&P/Case-Shiller index. Foreclosure filings in the Phoenix area -- including notices of default, trustee sale and completed auctions -- fell 39 percent in the first six months of this year from the same period in 2011, RealtyTrac Inc. reported July 26.
There were 332 actively selling new home subdivisions in the Phoenix area as of July 15, down from 400 on Jan. 1, said Jim Belfiore, president of Belfiore Real Estate Consulting LLC in Phoenix. More than 60 percent of the active communities are expected to run out of lots within 12 months at the current sales pace, he said.
“The normal for this market should be 750 subdivisions,” Belfiore said in a telephone interview.
The land bought by Hovnanian was sold by Courtland Homes in a sale brokered by Nathan & Associates Inc., according to an offering document obtained by Bloomberg.
Blackstone Group LP’s credit arm agreed last month to acquire a group of development sites from Hovnanian, with plans to sell them back to the homebuilder under a $125 million deal. Hovnanian has been depleting cash to replenish its land portfolio and take advantage of distressed prices to boost profit margins.
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