Hovnanian has announced that it will be leaving the San Francisco real-estate market, calling it “frothy” and saying the prices for land in the area are “lofty, almost speculative,” according to MarketWatch.
In addition to the San Francisco market, Hovnanian will also be pulling out of Raleigh, N.C.; Tampa; and Minneapolis saying it wants to refocus on other markets in an effort to accelerate plans to pay off debt as opposed to building revenue.
The move led to the company’s stock dropping as much as 15 percent on Wednesday. Hovnanian originally hoped to refinance its debt but now believes it is not an option, which means it needs to generate cash from other sources. That is where shrinking the business comes in.
Much of the company’s current projects are located in the New Jersey and New York areas.