More evidence of how the property clock works: the only thing that can get the cycle started anew, an increase in rents that makes existing buildings more attractive on a yield basis, then later helping to make it cheaper to build, than buy. This cycle is as old King Henry VIII at least, going back to the enclosures and his stealing of the lands from the people, i.e. privatizing the commons. This is how a rent-enclosed capitalist economy works and there is little any government or the Fed can do about it. Here is how it happens…

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After the financial crisis takes place, the property price falls are such that it is far cheaper to buy existing buildings at their ‘new’ market value, than to build something from scratch. So except perhaps in a few preferential locations (where land is in short supply, like London or cities hemmed in by water or mountains) builders just cannot make money building, so they don’t. If indeed they survived the downturn. This is quite a scientific process and VERY forecastable.

Anecdotal evidence that rents are increasing:

http://www.telegraph.co.uk/finance/newsbysector/constructionandproperty/8505668/Savile-Row-rents-now-twice-the-price-of-a-good-suit.html

http://www.businessweek.com/news/2011-05-31/rising-rents-risk-u-s-inflation-as-fed-restraint-questioned.html

This is totally in keeping with how the new cycle always begins; rising rents lead to (eventually) higher prices for established buildings, which will then (eventually) make it cheaper to build new homes and buildings. Once all the new building starts, a substantial improvement in the economy will begin. The new building activity eventually starts a land boom and by then the economy approaches the second half of the real estate cycle. (See the real estate clock.
http://phillipjanderson.com/real-estate-cycle/)
My book, The Secret Life of Real Estate and Banking details the clear repetition of this cycle; a pattern first illustrated by Homer Hoyt and Roy Wenzlick in two separate and independent studies in the 1930’s.