[A CA Guy]

I think things will collapse first to adjust to reality.

Here in Los Angeles, to get a below average home requires $129k yearly salaries. But the average in Los Angeles with families is around $55k. That is over $70k short of the market.

I think there will be lots of loans defaulted on, especially in the interest only area.

Good luck in your building, if it all goes belly up, you should get a contractor for reasonable.
Wood was more expensive because of the war with much of it being bought by the US for Afghanistan and Iraq.

[conservativebabe]

That is one of the other questions I have. If things go bad, it could be bad for those who already own homes, but for those who are buying/building,it seems as though things may be a bit cheaper sans higher interest rates.

It would seem that dropping values might also allow the house to built for more reasonable prices.

We aren't looking beyond our means at all, so I am not worried about financing more than we can afford. I would think that being reasonable in our expectations, either way we should be okay, I hope.