by Calculated Risk on 10/16/2006 03:56:00 PM

From Federal Reserve Bank of San Francisco President Janet Yellen: Prospects for the U.S. Economy. This speech is basically a repeat of Dr. Yellen's Oct 9th speech. But I missed this paragraph:

According to some of our contacts elsewhere in this Federal Reserve District, data like these are actually "behind the curve," and they're willing to bet that things will get worse before they get better. For example, a major home builder has told me that the share of unsold homes has topped 80 percent in some of the new subdivisions around Phoenix and Las Vegas, which he labeled the new "ghost towns" of the West. Though the situation isn't that bad everywhere, a significant buildup of home inventory implies that permits and starts may continue to fall and the market may not recover for several years. While builders remain hesitant to cut prices so far, and instead offer sales incentives, price cuts at some point in the future seem almost inevitable.