I can only wish but, NOPE. Just resale values.

:(

SOME material prices are down, but steel, concrete, and oil products are still high. Also, don't forget that gas prices are up, as are insurance costs and labor costs. I see no reason that your overall costs for building would be lower....I think assuming that housing starts are lower translates into lower building costs is a false assumption, particularly in labor costs; all people have to make enough money to live, since food, rent, housing, fuel, etc, haven't gone down (it's called inflation), if they can't make the money in providing construction labor, they'll leave that market for something else. I would not expect bids to reflect lower housing starts.

Jason,

I follow your reasoning but have not the labor cost inflated during the bubble "just to catch a piece of it" ? Then there should be a reason to to step down on the ask side..

BTW, after my posting I found this material cost report.
How would you interpret that the "inputs in single family housing construction" (last paragraph down) is only 16% up from 3 years ago ?

Here is a link that might be useful: Construction Materials Costs

I wouldn't. I'm a builder. Costs are up, not down. You will not see a decrease in overall prices.

costs are up here in DFW, starts of custom homes in some markets is as strong or stronger than they have been...think prices are still going up because of land prices and just because people will pay them...we were thinking that the slow down hyped so much in media and the number of foreclosures would make what we wanted to build more affordable...not so...
does not seem to be coorelation between the market sections...there are some high-end homes that will probably be going into foreclosure this next quarter based on something I read on real estate news letter, but those are pre-owned homes...have seen only one builder in this area doing homes in 500 range going bust...

House prices here north of Seattle continue to rise at 5%/yr.

I see two weaknesses in the general use of Shiller's graph. The first, if I understand the terms correctly, is that the building costs do not reflect regional rising land costs and goverment fees. The second is that the population growth line is much steeper in some parts of the country. If these factors were inserted in the graph I think the building cost indes would be much closer to the housing cost index in many parts of the country. Tom

It all comes down to supply and demand, especially since the barriers to entry into the construction field are not significantly hindered by start up costs. I am not saying it isnt expensive to get a building company started, but it obvisouly isnt like trying to start an airline company.

The reason in my opinion that custom housing prices have not dropped yet, and i emphasize "yet" is because of the speciality of the work involved. Most custom homes are not cheaply built like most of the product the national homebuilders are putting out there (big boxes, no architectural enhancements). In North Carolina, the majority of the "custom" homes are priced from the low 300's to high 700's. Your typical small custom builder of these homes builds maybe 10-15 of these a year and very few if any are spec houses, therefore, the demand for their product as a whole has not significantly dropped yet. The national homebuilders are the ones really hurting in our area - as can be seen by significant incentives on the masses of inventory they have sitting unsold on the ground.