NEW YORK (Reuters) - Cancellation rates among U.S. home buyers are running above last quarter's levels as the housing market slows, the chief executive of luxury home builder Toll Brothers Inc. (TOL.N: Quote, Profile, Research, Stock Buzz) said on Tuesday.
"I think our cancellations are running higher than on the last call," Robert Toll said at the Reuters Real Estate Summit in New York.
Toll cited a perception among buyers, fueled partly by media coverage of the housing market, that homes are a depreciating asset. He also pointed to the supply of "speculative housing" as well as a national "malaise" caused by last autumn's hurricanes.
But he predicted buyers who sit out the current industry slowdown will regret their decision later, and said cancellation rates were likely to stabilize over the next six months.
"I think you're going to see a very strong housing market again," Toll said.
The extent of speculative buying has made a big difference in whether a region is a "B" market or a "D for dog" market, Toll said. In areas like Washington and Northern Virginia, a retreat by speculators has pressured sales.
"It's a double whammy," Toll said. "You've lost the demand and you've picked up extra supply." He estimated speculators -- who buy homes as investments and never live in them -- accounted for as much as 10 percent of markets such as that for Delaware coastal properties.
Toll also said sales in Northern California were still "pretty good" though nowhere near their peak of recent years when demand was "feverish." He said the Connecticut market has slowed from as recently as a month ago, but pointed to continued strength in Arizona and Colorado.
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