Housing Woes Still Building

Lennar's management pointed to three factors needed to restore balance in the housing market. The company said inventory of new and existing homes have to stabilize and then be absorbed, and mortgage markets need to settle. As well, consumer confidence needs to be restored, Miller said.

"The question that investors should have been asking themselves six months ago was whether or not 2007 was going to be the bottom," says Michael Elrad, senior managing partner with GEM Realty Capital, which operates a private equity real estate business and a long/short real estate hedge fund.

"The two questions investors should be asking themselves now are how bad can 2008 get and is there a possibility that 2009 could be sluggish?" he adds.

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