Lots of evidence that the housing market is slowing; prices are not rising as quickly as in the past, inventory is building and perhaps most tellingly insiders are selling shares of home building firms at record pace.Click here for the whole thing.
Insider trading is a good example of a "costly signal" sent by managers. However, while trading patterns of insiders provide information, a lot of research has shown that insider sales are typically much less informative than insider purchases. This is because insider purchases result from an insider "putting their money where their mouth is". In contrast, insider sales can occur for either information-based or non-information based reasons (it could be just that the manager's son just wrapped the Porshe around a tree, and the manager needs money). This is further complicated by the general trend that insider sales have increased in recent years due to the increasingly common use of equity and option-based compensation.
As an aside, I'd be interest in seeing if insider purchases at home building firms have also tailed off. If so, that would add more credence to the insider signal.