Home Builders Starting to Look Up - WSJ.com

"14 publicly traded home builders have written off an aggregate $33.65 billion since the first quarter of 2006 through the end of 2009's third quarter."

Home Builders Starting to Look Up - WSJ.com

The quotation at top, from the article above, is important. It defines the span of the housing downturn, beginning earlier
 than we generally think of it (because builders invest long before homebuyers buy), and going through 2009 (some public companies haven't disclosed yearend numbers yet).

Builders support the bottom of the market when it comes to land and lot sales, so when they pull out of the market (due to poor sales prospects), other prices fall to fill in the gap. But they can't stay out forever and stay in business (that's the curse of being a developer, don't ask me how I know that). So when prospects begin to stabilize or look up, they begin to re-enter the market, supporting the bottom end again. We will see that begin to happen by botique developers in 2010, judiciously, and it will help to support the moderate recovery in the housing markets already being seen in desirable parts of our area. It won't help the outlying areas where people didn't want to live anyway; but the South Bay's recovery will be assisted. - David