The chief financial officer of Hovnanian Enterprises, Larry Sorsby, said home sales and price increases have softened to more “normalized” levels in 2006 from their frothy levels in 2005.

However, he remains confident that the industry is heading for a soft landing, and not off a cliff.

“The reports of my demise – as Mark Twain once said – have been greatly exaggerated,” said Mr. Sorsby, while speaking yesterday to a Wachovia homebuilders conference, which was broadcast over the Internet. “For quite some time, various pundits have been predicting the demise of this industry and we’ve continued to perform very well.”

Mr. Sorsby cited stories as far back as 1997, 2001, and 2002, in which bears were predicting a housing crash. “They’ve been wrong each and every time. The industry continues to perform well,” he said.

However, he acknowledges the market has “moderated” over the past few months.

He said pricing and affordability have hit a ceiling in some of the frothier markets, and are now slowing.

“But it’s certainly not some kind of bubble that’s going to burst or an industry that’s going to crash and burn,” he said.

Instead, Mr. Sorsby sees the industry heading for a “soft landing,” where the sales pace and price increases slow to more “normalized” levels, and the company offers more incentives in certain markets to move sales.