The Associated Press is reporting on housing markets. "The five-year housing boom is indeed over, judging from growing statistical evidence and the performance of some of the nation's leading builders, and the slowdown is already rippling through the economy. Explanations for the recent cooling-off vary."

"'We started to see the strain in July and August, and by the fourth quarter the market definitely had slowed,' said Layne Marceau, president of the Northern California region for Shea Homes, one of the nation's largest private builders. Rising prices and interest rates pushed more buyers out of the market. When prices finally did cool, sellers couldn't command a high enough price on their old house to buy the new one, said Marceau, who believes the slowdown is temporary."

"Builders don't like to cut prices, it angers customers who paid more, but last week, Centex Corp. advertised $25,000 off on select homes in the Dallas area after making a successful similar offer in California. Around the country, builders are throwing in incentives. Some equal 10 percent of the home's list price."

"The median price of an existing single-family home has declined since peaking at $219,700 in July to $210,500 in January, according to the NAR. David Seiders, chief economist for the National Association of Home Builders, said California, Las Vegas, Florida and the Washington, D.C., area 'have the largest potential for a price slowdown.'"

"The rising prices in those markets were fed by speculators who bought homes intending to 'flip' or sell them for a quick profit, Seiders said. 'The biggest fear I have is investor-owned units coming back on the market in large numbers,' he said."

"Mike Mishler said, 'Maybe it will slow down in a couple years, but right now we have lots of California folks coming in, and empty-nest people looking for new homes.'"

"Mishler, president of the local builders association, says Texas markets are holding up because they are affordable. But even in Dallas, the inventory of unsold homes rose to a record in the fourth quarter."

"For now, home builders are busy finishing the houses that customers ordered last year. In a sense, their 2006 results are already on the books, and they expect another good year. Investors have been bidding down the stocks of home builders since July. The nine largest publicly traded builders have seen their shares fall 14 to 44 percent since their peaks, with Toll Brothers and Hovnanian the biggest losers."

"(Analyst) Alex Barron said builder stocks have been trading at relatively low multiples of their earnings since the late 1990s because investors always believed the strong housing market was too good to last. 'Investors kept saying, 'Next year housing will go down,' Barron said. 'I guess they're finally right.'"