Speculators leaving the market creates less demand for housing.

While Miami-based Lennar recently reported that its second-quarter profit was better than forecasts as their revenue jumped 56%, company representatives said that nationwide activity is softening with "speculators exiting the market and changing homebuyer sentiment." Lennar was the nation’s third-largest builder for 2005.

Home builders are starting to see lower demand for new construction nationwide as well as higher cancellation rates. This is apparent in the Santa Clarita area, where developments like the Canterbury Collection in Tesoro del Valle still have some remaining inventory. It also doesn’t help that a high percentage of the sales for that development were to investors, who are now competing with the developer for buyers.

We’re also starting to see more creative ways to sell new construction, with Centex Homes using actors to create a more "homey" environment with its Home Life marketing program at Santa Clarita’s Milestone development.

Lennar saw a healthy 10% increase in the average sales price of delivered homes for the 2nd quarter of 2006. A government report said that new-home sales increased a surprising 4.6% in May.

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