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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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From: russwinter	11/1/2006 3:33:23 PM
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I don't think the macro statistics reflect accurately what's going on in many local markets," says Bruce Karatz, CEO of national home-builder KB Home. In many once-hot regions, order cancellation rates are running above 40 percent, new-home sales volume has dropped 50 percent, and new-home prices are down 10 percent to 25 percent. Karatz says the current downturn is worse than any he has seen - even the early 1990s market that left so many big builders reeling. money.cnn.com Karatz in March, 2006: businessweek.com I don't see a fundamental slowdown other than in the hottest markets. Things don't continue through the roof forever. This is a breather in prices, and that takes some steam out of the market. In some markets, 10% to 15% of buyers were speculators. You take them out, and the market drops 10% to 15%, and it takes three to four months for whatever overhang there was to be sold, and then the market stabilizes. That's where I think we will be three to four months from now.

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