NEPTUNE, NJ-Three experts offered their perspectives on NewJersey’s housing market at a breakfast meeting, hosted by the ShoreBuilders Association of Central New Jersey, at the Jumping BrookCounty Club here. The featured speakers were Joe Riggs, grouppresident of K. Hovnanian Homes; Ed Walters Jr., president andfounder of the Walters Group; and Arvo Prima, president of PrimaBuilders. Peter Reinhart of Hovnanian Enterprises moderated theevent.

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The depth of the downturn in the housing industry has hitbuilders across the country, causing them to cut back on productionand reassess strategies. "This recession was far deeper than anyoneexpected," said Walters, who explained that his Barnegat-based firmhas survived over the years because it was able to diversify. Thedevelopment firm has expanded its scope to include single-family,multifamily and large-scale commercial projects. He laudedattendees for surviving in today’s housing market, stating that,"We should all be proud of the fact that we’re still inbusiness."

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Walters gave a regional viewpoint, explaining that among thestruggles facing builders today is the lack of consumer confidence."People are still nervous about whether or not they’re buying in adeclining market," he said. "As a result, new construction salesare slightly behind where they were last year at this time.However, prices have stabilized, and our home values have increasedslightly from last year."

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Walters sees market conditions improving, pointing to anincreased occupancy rate at the company’s Atlantic Heightsapartments in Barnegat, which has reached 98%, up from a low of 85%a year earlier. "It’s only one property, but it’s an indicationthat our economy is getting better and that people are finding jobsand are more confident," he noted.

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"This is a historic downturn," acknowledged Riggs. "You have togo back to 1889 to find a time when our industry was as slow as itis today. In the heart of the Great Depression we were doing doublethe starts per thousand US citizens than we are today." He addedthat we need to monitor the level of supply, liquidity and consumerconfidence.

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"Overall, the market is improving," observed Prima, a localhomebuilder active in the Ocean and Monmouth County markets.Discounts and incentives remain an important part of the equation,he explained, but as sales momentum increases, the incentives willbe slowly phased out.

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"There is some good reason for optimism," emphasized Riggs,citing the increase in stock market volume over the past year andlow interest rates. "Home prices have definitely stabilized, andthere is pent-up demand. We are sowing the seeds of the nexthousing boom. None of us knows when it will take place, but takeplace it will."

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To adjust to today’s market, K. Hovnanian has downsized and isnow focused on improving efficiency, looking for land opportunitiesand reactivating communities that were on ice, according to Riggs.Looking ahead, he advised attendees to "hope for the best, plan forthe worst, study history and identify what has to happen for thingsto improve."

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