Are Insiders Dumping Homebuilding Stocks?

The New York Times reports some big insiders are dumping the homebuilders:

Executives and directors at many of the nation's largest development companies sold stock at a record pace this summer. Insiders at the 10 largest home builders by market value, including D. R. Horton, KB Home, Toll Brothers and M.D.C. Holdings, have sold nearly 11 million shares, worth $952 million, so far this year. That is a huge jump from the 6.8 million shares, worth $658 million, that insiders sold during all of last year, according to data compiled by Thomson Financial.

Market specialists often view heavy stock sales by corporate insiders as a possible indicator that share prices are headed lower. Some analysts say that the share sales by home builders are reminiscent of the heavy dumping of stock by technology company executives just before the technology bubble burst in 2000. For that reason, the staggering level of insider sales has analysts and investors wondering if home builders see something menacing on the horizon, like a cooling of the real estate market.

We suppose that the insiders don't feel there is too much upside left for their stocks.This is a key indication that the top in real estate might not be that far away.