AVATAR HOLDINGS REPORTS NET LOSS FOR 1998

Press Release: Avatar Holdings Inc.

April 4, 1999
Avatar Holdings Inc. has reported a net loss for 1998 of $22,785,000 on revenues of $113,482,000, compared with a net loss for 1997 of $26,989,000 on revenues of $96,016,000. The decrease in loss for 1998 is primarily attributable to an increase in home-building profitability at Avatar's communities in Poinciana and Cape Coral, Florida, and Rio Rico, Arizona. Home-building profitability is partially offset by an increase in interest expense and general and administrative expenditures, as well as an estimated loss of $6,400,000 on the disposal of discontinued vacation ownership operations.

Although revenues generated through closings increased only $13,485,000 (or 31.3%) from 1997 to 1998, the pre-tax profit contribution represents a substantial improvement, having increased from a loss of $2,857,000 for 1997 to a profit of $2,849,000 for 1998, representing an improvement of $5,706,000. Contracts signed at Avatar's Harbor Islands community increased $22,912,000 (112.8%) from $20,316,000 (44 units) in 1997 to $43,228,000 (87 units) in 1998. Results for 1998 do not reflect such improvement due to the length of time required to design and construct custom and semi-custom homes. However, the marketing costs associated with the sales are reported in 1998. The revenues for 1998 sales will be reflected in future periods as the units are closed. It is anticipated that units under contract at December 31, 1998, will generate positive Harbor Islands' cash flow for 1999.

Results for 1998 of certain of Avatar's Florida utilities subsidiaries are reflected as discontinued operations. Results of the discontinued Florida utilities operations were income of $5,101,000 on revenues of $34,594,000 for 1998, compared to income of $4,425,000 on revenues of $33,068,000 for 1997.

Results for the discontinued vacation ownership operations were a loss of $1,458,000 on revenues of $21,244,000 for 1998, compared to a loss of $115,000 on revenues of $14,600,000 for 1997.

Avatar's assets at the end of 1998 totaled $472,991,000, including $208,599,000 related to discontinued operations.

Avatar Holdings Inc. is engaged in real estate and water and waste-water businesses primarily in Florida and Arizona. Its principal real estate operations are conducted at Poinciana in central Florida near Orlando, Cape Coral on Florida's west coast, Harbor Islands on Florida's east coast and at Rio Rico, south of Tucson, AZ. The Company's utilities operations consist of 17 water purification and distribution plants and 12 waste-water treatment and disposal plants, as well as contract services for unaffiliated third parties. Avatar's common shares trade on The Nasdaq Stock Market under the symbol AVTR. The 7% Notes trade on The Nasdaq Small Cap Market under the symbol AVTRG.