MIAMI-Lennar Corp. opened the first quarter of the year with revenues of $3.2 billion, up 35% from the same quarter a year ago, and net earnings of $258.1 million, a 34% rise over the comparable quarter of 2005. New orders for 9,793 homes, however, represent just a 4% increase during this first quarter in comparison with opening quarter a year ago.

In light of this, during a conference call, Stuart Miller, president and CEO, acknowledged a "slowdown" in some markets. "Price appreciation in these markets has moderated relative to the appreciation experienced over the past few years," he said. In response to analysts' questions, Miller identified Sacramento, San Diego and Tucson as places with lower orders year over year. He also said the company had increased sales incentives in Minnesota, Illinois, Colorado and Nevada.

With the exception of Northern Virginia, he said sales have been more consistent on the East Coast. Activity has appreciated, year over year, in Florida, Texas and the Carolinas, and margins also improved in Florida, the Carolinas and New Jersey.

The cancellation rate for homes under construction is currently 24%, Miller said. "The typical range of cancellations long-term is between 20% and 30%," he said, "although it has been under the 20% mark over the past couple of years." This quarter's increase is not cause for concern, he said and added, "we've been managing the number of speculators well. That doesn't mean we don't have some. There is likely to be some overhang from speculators in some markets, but that overhang is likely to be absorbed."

Looking forward, Miller forecasted a slowing of price escalations, but "no bursting of a bubble or meltdown." He described the market conditions ahead as "A fairly soft housing correction."