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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: CalculatedRisk who wrote (60108)	8/17/2006 2:08:37 PM
From: Ramsey Su	Read Replies (3) \| Respond to of 306849

Just listened to the conf call of OHB biz.yahoo.com Needless to say, analysts were asking about the negative new orders in Florida. Basically, they had 50 some orders and 90 some cancellations, netting a minus 48 new orders for the quarter. They said the reason was from one area (I did not get the name down) where they were too cocky and went under contract with too many buyers with only just $5k deposit or less. The buyers, especially the flippers, all walked at closing time. In California, there are a ton of contracts with only $5k deposit, especially all the Inland Empire stuff. We will soon see the mother of cancellation rates here soon. At closing time, there are going to be a lot of incentives offered just to get the buyers to close. Margins are going to collapse.