The press is turning its focus to the homebuilders. "Countrywide Mortgage CEO Angelo Mozilo believes that the 'housing market officially turned south in January,' according to Banc Investment Daily, and that some overheated markets may see prices plunge by up to 40 percent. Mozilo mentioned Las Vegas as one of those risky markets."

"But nary a discouraging word was spoken at the Las Vegas Annual Housing Outlook hosted by local title company sales representative Richard Lee and Dennis Smith. But builders I talked to at the Outlook don’t believe Smith’s numbers. They say their traffic numbers are half what they were last year and cancellations are soaring, with the primary reason being potential homebuyers can’t qualify with the higher mortgage rates."

"Buyers who can qualify are able to play competing homebuilders against each other for free options and upgrades. Builders who have completed houses to unload and the clock ticking on fully disbursed construction loans are evidently bothered. According to one commercial appraiser I spoke with, there is at least one Las Vegas builder with standing inventory that is offering eight per cent commissions to outside realtors who bring buyers to their project."

"One builder with a project in the busy southwest confided that he dropped his prices $20,000 per unit to compete with the handful of large publicly traded builders that have projects surrounding his. Unfortunately, that move just prompted the big builders to drop prices more. He described competing in that market area as a 'bloodbath.'"

From Realty Times. "If the full-page ads in my local paper are to be believed, new home demand has begun to flag. The issue is not how many units will be sold, rather it's the way they'll be priced. Recent ads have offered new home discounts ranging from $70,000 to as much as $100,000."

"These new homes are being sold by major builders in one of the best markets in the U.S. The Washington, DC region includes some of the richest areas in the nation by income: Fairfax County, VA (#2), Loudoun County, VA (#3), Falls Church, VA (#8), Howard County, MD (#10) and Montgomery County, MD (#13). If builders are cutting prices in a region known for high household incomes, you have to wonder what's happening in other population centers."

"If builders are openly discounting prices, it means they're competing with recent buyers who now wish to sell. While most owner-occupants tend to hold homes for a number of years, short-term owners include a large percentage of investors hoping to buy-and-sell as soon as possible. The growing number of new-home contract cancellations may well be evidence of entrepreneurial discontent. Speculators may prefer to lose a deposit than to close on a home that costs money to hold each month."

"Speculators in the past few years have routinely thought of new homes as sure-fire investments. If discounts mean the flames have gone out, then a lot of builders, and a lot of speculators, will have a tough time ahead."

"Dustin and Rebecca Snook believe they could have listed their North Las Vegas home for more, but considering softening conditions, were prepared to compromise. The decision appears to be paying off. 'We thought we should probably go for $75,000 more, but we bargained out what could be accomplished with the listing price. We had to go with a price that was reasonable for the time,' said Dustin Snook."

"For their own good, Dustin Snook and his wife knew they had to consider the big picture. 'I guarantee, if we listed for $75,000 more, we probably would have sat quite some time.'"