It was only a matter of time before another homebuilder CEO would claim that the housing market had bottomed. Ara Hovnanian, CEO Hovnanian Enterprises (NYSE:HOV), put his stake in the ground on Friday, 9/14/07, per Bloomberg. Apparently he learned from Robert Toll’s pronouncement in March. He added a caveat to his claim, “The bottom is very near but I think it’s going to stay along the bottom for a while before a recovery.”
If the bottom is in why is Hovanian having a fire sale this weekend or as they are dubbing it the “Deal of the Century.” The company is offering discounts of up to almost $150,000 on homes.
If there is one thing that I have learned from the stock market - it is that picking bottoms is a losing proposition. Matter of fact, I will pass on the first 15-20% off the bottom. The bottom can only be identified in hindsight. In other words, the bottom is in when homebuilders start raising prices not having fire sales.