Very good article. However I think a huge factor is being ignored. The most pernicious side effect of falling prices isn't pullback in investment and construction. It's the immense leverage lender and builder lobbies will apply through decades of regulatory capture, and the massive outcry that will come from homeowners who have bought into the idea that real estate is a great way to build wealth. Anything that results in lower prices will result in damaging the wealth of millions, of the group of Americans that probably has 99% of the wealth and political power. Yeah that won't fly. And I agree the "correction" is overdue and those wealthy boomers whose wealth has doubled and tripled since retirement just by riding that wave (and the stock market, another ponzi scheme) should transfer some of that wealth back to the masses in the form of depreciation. But it won't happen. Not in America, not without something horrible happening to make them give up that wealth.
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