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Doug Kass believes the worst is still to come in housing-Barron's

In his "Up and Down Wall Street" column, Alan Abelson points out that while Doug Kass is no longer short housing stocks, he believes the worst is still to come. Kass says that the supposed "modest increase" in new home sales may come from the Census Bureau not adjusting for cancellations when house sales are comprised, which could lead to overstated sales and understated inventory. Cancellatoins are usually about 15% of orders for the home builders but have soared this year, the third quarter rate for each of the leading home builders was: Centex (CTX), 37%; DR Horton (DHI), 40%; KB Home (KBH), 53%; Lennar (LEN), 31%; Pulte Homes (PHM), 36%; Beazer (BZH), 57%; Hovnanian (HOV), 35%; MDC Holdings (MDC), 49%; and Standard Pacific (SPF), 50%.