WITH MONEY STREAMING IN AND backlogs running into next year, most builders don't believe that housing's incredible ride may be sliding to a stop. However, Mark Skousen, a professor at Columbia University and chairman of Investment U, an independent investment counselors group, says that there have been a few, albeit subtle, indications that a slowdown is in store. “No bull market lasts forever; trees don't grow to the sky. I think we've reached the saturation point,” he says.

Skousen says that mortgage REITS' stock price falloff was the first sign. Recently released Census data indicates a few other wobbles. In July, the median home sale price dropped by approximately 3 percent while August preliminary figures show that new home sales tumbled by nearly 10 percent.

Arise in home builder insider stock sales also may be a cause for concern. Hovnanian Enterprises, K.B. Home, Ryland Group, and Toll Brothers have all posted the largest insider stock sales since 1985, according to an article in The Business Journal of Phoenix. The journal also reported that in late August, Merrill Lynch strategist Richard Bernstein sent a memo to top investors warning them that the volume of insider sales echoes activity during the 1990s tech surge that ended in a dot-com collapse.

With these factors casting a shadow on the industry, Skousen advises that builders pull up on the reins a bit. He suggests creating a cash cushion or looking for alternative investments to keep builders insulated from any downturn. “It's been a wonderful run, and you need to play a little more conservative [now],” he says.