We believe that following the sharp rally at the start of ’06, home-building stocks may come under pressure on eroding fundamentals.

While we have expected weaker trends in orders, we were surprised by the magnitude of the 20% decline in the quarter given the significant community growth.

We believe MDC has greater risk of earnings decline due to lower margins from its short land supply and exposure to markets where affordability is stretched.

While there may still be some downside to earnings, we think the sharp reduction will likely be viewed as being relatively better than other companies, who may need several modest reductions or a sharper reduction...

We believe the high pace of construction activity and softening demand will lead to increasing inventory levels through 2006 and less price appreciation.

We do not believe that the proposed transaction is an indication that we’ll see a significant increase in buyout activity.