I've been negative on the industry outlook for quite some time. I think next year is going to be a down year with competitive pricing. The economy is slowing and housing, which tends to be the swing factor, is slowing. I think it's going to be more of a replacement market next year.

It's a market that long-term is going to stabilize at a high level.

That is a secular demographic shift, which is not going to reverse unless we close our doors and not let anyone get into the country anymore. If you have a chronic shortage [of housing], prices tend to go up to the rate of inflation or a little more. You get to an equilibrium. ... I think we're in that period now.

The extraordinary financial performance of conventional homebuilders in this economic cycle leads us to believe that there is a strong possibility that their stocks could be poised for record-breaking valuations.

The extraordinary financial performance of conventional homebuilders in this economic cycle leads us to believe that there is a strong possibility that their stocks could be poised for record-breaking valuations,

Barring a major economic dislocation, such as a big pickup in inflation, I think home builders can grow their earnings at a double digit basis for the next two to three years.