Housing sector could become a rough neighborhood

Shorting the housing sector is the gift that keeps on giving - builders, mortgage companies, Freddie, Fannie.. enjoy

I don't know what's going to happen to home prices. Certainly, there are many factors to prop them up, including immigration and population growth. Given how many smart people have been so wrong about the future of housing prices, I don't want to even guess.

What we do know is that many of the publicly traded companies associated with the housing boom are already getting hurt. The latest example came in early November when high-end home builder Toll Brothers (TOL) stunned investors with the news that it wouldn't build as many homes in fiscal 2006 as it had earlier forecast. That day, Nov. 8, the stock dropped 14%. It has since recovered some of that loss. But that was just a blip. From its 52-week high in August, Toll Brothers stock has suffered a drop of around 40%, wiping out billions in shareholder wealth.