>We've seen this in 2008. Banks behaved insanely. It's not 2008 anymore. Things have changed substantially. Banks became much more risk-adverse in the wake of

>We've seen this in 2008. Banks behaved insanely. It's not 2008 anymore. Things have changed substantially. Banks became much more risk-adverse in the wake of the burst of the housing bubble and subsequent economic crisis. The era in which loan officers are incentivized to skip risk evaluation has passed. My point was not that there's some grand conspiracy among banks. Merely that any loan that uses real estate as collateral will be riskier if real estate prices are declining, than if real estate prices are increasing. That means that construction loans are going to be harder to get when prices are decreasing. Which suggests that the ability to use construction loans to lower the absolute price of housing is self-limiting.