Centex chairman and CEO Tim Eller outlined the six elements of a market trough this morning to kick off the Wachovia Home Building and Building Products Conference in Las Vegas.

Eller said that the six elements of a trough are when foreclosures rise, the economy slows, housing starts fall precipitously, the new home market corrects much faster than the existing market, land prices begin to soften, and home builders with liquidity begin to re-invest.

"What we find is that the first four things have happened, but we have yet to see land prices soften and builders with liquidity have not begun to re-invest," he said.

While Eller could not say precisely when the final two items on his list would happen, he did point out that housing starts are about to reach the trough of about 600,000 starts that the industry experienced in the 1990-1991 recession.

Moving forward, Eller said Centex is focused on streamlining its processes and operations. He said the company went from 4,500 floor plans at the peak of the boom and is now down to 700, with plans to reduce plans even more.

He said Centex will focus on "A" locations nationally and stay away from the fringe housing markets. "The 'A' locations will always prevail," he said.

Eller said the company had 44 divisions at the peak and is down to 35 today and will be down to about 30 by the company's next fiscal year. For example, in the Southern California, Centex went from five divisions down to one centered in the Inland Empire.

The company also plans to maintain a more flexible land position, going "shorter" on owned properties and "longer" on options as the market matures.