And to think we're just getting started.... Boy this feels like what happened to Cisco in 2000.. build all this capacity and then poof! The orders dry up and the cancellations pour in.
Home builders are growing concerned about an increasing number of cancelled new home orders, which experts say could be a sign of an underlying weakness in the recent run in home prices.
Specifically, the cancelled orders could be the latest warning sign that buyers who were turning to real estate as an investment, rather than for their own housing needs, are shifting out of real estate. And that could mean that in many hot markets, the air is about to come out of over-inflated real home prices overall.
The flight of investor-buyers from the housing market and the increased cancellations could therefore push real estate prices lower in different markets.
"If you've overbuilt the market and sales get cancelled, you have to do something with the homes," said Seiders. "The incentives we're seeing builders offering are clearly designed to support prices and stop cancellations."
February 25, 2006
Posted by blogger at 2/25/2006