The housing industry is more than just real estate. As seen in 2005-2009, new construction fell to the way side, taking with it the labor forces, material suppliers and the localized income that went with it. Anyone that made their living in new construction lost nearly everything they had ever worked for. Many developers lost the properties and the investments placed into those properties with curbs, streets, utilities and the general developing dollars invested. These properties fell to the bank, creating a shortage of lending funds available to continue these levels of projects.
Once property values start to fall, sellers find it difficult to keep up with the constant adjustments to their pricing against bank owned properties. Buyers look at the values created by decreasing listing prices of bank owned and short sale properties. Trying to sell a non-hardship priced home becomes almost impossible without giving it away. When there are more properties on the market than the number of buyers looking to buy, new construction projects suffer even greater.
If this excerpt from the new book, "Finding New Neighbors" is interesting to you, please drop me an email and I will send you the complete chapter.
references: wesley brooks, abc.net, bing.com