> already-near-zero margin on real estate development
Why is the margin so low when the prices are so high? Is it because the value of housing is already priced into the value of land?
> The problem is: why would you build more housing as prices fall?
Why would you want to? When you stop being able to sell more houses, that's the sign that you've built enough.
Yes, the prices of inputs are very high and rising. Mainly land and labor, but materials aren't cheap either. Housing is also one of the few thing we need at massive scale but which has diseconomies of scale. The more you develop an area, the more expensive it gets to develop it further.