Originally Posted by nequidnimis
Your program is generous but fails to address the problem of the increasing number who owe more than their houses are worth... A moratorium on new construction until supply and demand are in equilibrium would help stabilize house prices. Hopefully, developers who persist on building in the current environment will carefully asses the numbers. Although they too can always walk away if they owe more than their developments are worth...
You cannot generalize "this environment" to all locations and across the price/quality spectrum. There is certainly not the supply/demand disequilibrium in San Francisco that there is in, for example, Stockton nor is there the same situation at the top end where Turnberry positions its projects as there may be at the level of, say, SOMA Grand. I am still unconvinced that there is going to be a glut of top end condos in San Francisco next month or 2 years from now.
As for "house" prices, almost nobody has been building "houses" in San Francisco for years. If prices of those are falling, it's not from oversupply but rather people suddenly unsure of what the appropriate value is. I think anybody whose mortgage payment is less than the rent they'd have to pay for an equivalent place is safe. And rents, I've read, are still rising in SF. But if you could rent your "house" or apartment for a lot less than your mortgage payment, you could have a problem.
In the case of 45 Lansing, though, I think these are going to be unique properties--very large, very high end finishes; almost unique in this market. And unless substantial wealth disappears from Northern California, I think that means they will be in demand if they are built.