K. Hovnanian Homes adjusts its operations while remaining a top homebuilder in the Chicago area.
By Brian SalgadoWhether the economy is booming or muddled in a standstill, K. Hovnanian Homes remains a leader in the residential real estate market. Despite the economic conditions here in the Chicago area, K. Hovnanian is entrenched as the fourth-largest homebuilder in its sixth year in this region.
The company was founded in 1959 by Kevork S. Hovnanian and maintains headquarters in New Jersey. The homebuilder entered the Chicago market in 2005 when it purchased Town and Country Homes, a private residential builder with a 50-year history of its own. The Chicago division was rebranded as K. Hovnanian earlier this year.
A lot has changed in the residential market since 2005, but Andy Konovodoff, president of the Chicago division, says K. Hovnanian has the ability to adapt and adjust to volatility as it happens. The company closed 1,240 homes in 2005, according to Konovodoff, and K. Hovnanian expects to close 160 this year.
While that may seem like a drastic drop, Konovodoff says it reflects realistic expectations for the new economic realities in the real estate industry. For instance, a 2,500-square-foot single family home may have sold for more than $300,000, while the same property retails for between $230,000 and $240,000.“We adjusted down very rapidly, and we’re a small company now,” Konovodoff says. “We are actually growing this division in Chicago again and we’re expanding our community count and our delivery number, so we’re pretty positive.”
Konovodoff is particularly excited about four communities in the Chicago suburbs that reflect K. Hovnanian’s new commitment to smaller developments.
Tall Grass Ridge is a 37-lot subdivision in Mundelein that opened in May with price points starting at $224,995 for homes between 2,052 and 3,238 square feet.
Regency Estates in St. Charles features 44 units that range in price between $259,995 and $334,995 for homes ranging between 2,131 and 3,044 square feet.
With 33 lots and price points between $394,995 and $484,995, Glenrise Grove in Glen Ellyn (featured on our cover) offers single family homes ranging from 2,517 and 3,549 square feet. In North Aurora, Mirador has 52 lots, as well.
“I think we are unique with our product,” Konovodoff says. “We have good locations with some infill and some that are further out. We also have variety with our product. We have a nice pallet of pricing where we offer something for everyone.”
Konovodoff says the real estate market appears to be rebounding, but it will be a slow and steady process. He believes things will turn around for the better in 2012, but with foreclosures and short sales still saturating the market, it won’t be as fast as everyone hopes.
“Starting in 2012, we will start climbing out of this,” he says. “Building permit numbers will start to grow a bit, but it will not pop out and go crazy. At the end of the day, we will start slowly coming out of this real estate downturn. This is America – we’ve fought through harder things than this.”