New York from 1910s-1930s. Manhattan had more people living on it in 1920 than it does right now. During that time there was a ton of construction: prices went

New York from 1910s-1930s. Manhattan had more people living on it in 1920 than it does right now. During that time there was a ton of construction: prices went from $10/sq ft to $15/sq ft. Then with the market crash, demand for the overbuilt city real estate went down, leading to costs more in the range of $5/sq ft: http://www.millersamuel.com/change-is-constant-100-years-of-new-york-real-estate/ http://www.millersamuel.com/change-is-constant-100-years-of-... No, housing prices do not necessarily immediately sink. Developers will only build when they believe they can turn a profit. But you can overbuild during boom times and allow housing prices to correct when demand diminishes.