Whither housing?

A new study by McGraw-Hill Construction and Deloitte & Touche USA says the housing market will slow down rather than fall down. Of course, they're only looking at builders' new housing projections. The resale market is the thing to look at because, with all the creative financing, people are living for flip. If the builders undercut the resale market too much, we will see large numbers of people locked into unmanageable financing.

Things aren't entirely rosy for the builders, either. The single item that most affects their bottom line is availability of land, and land that is worth any kind of a damn is getting scarce. Out here in the desert, the real issue is water, because no land is worth a damn without water rights. I have yet to see any municipality around here seriously build water availability into its land use planning. Bad idea, ignoring forces of nature when you're working with real estate.