Builders beware, you're over saturating the market

In July, new home construction declined over 6% compared to June and almost 21% from last July, according to the California Association of Realtors. Is this telling you anything? It's telling me a lot! To me, this trend is saying to the builders to stop building. They have over saturated the market, and now are slowly building less. That isn't enough though. There are too many homes and too few buyers. As buyers fear getting into a market that is controlled by them, every extra house is one more reason the sales have dropped significantly. On a positive note, building permits have dropped 23% since last July. Now I am not against new construction, on the contrary. I find new homes more appealing since they cater to the buyers so much more, but its the current market that is diluted enough already. Its like a batch of lemonade with too much water (inventory) and not enough sugar (buyers). It may be cold and good for you, but that first sour taste is enough to send many away. Lenders are trying to sweeten the batch themselves so they may assist others and their companies in order to correct the market, but that sour taste stops enough consumers from adding a little sugar and drinking it down with refreshment. Thanks to the media, our lemonade is advertised as a terrible batch... they must not know their history.
The hardest part is that people grow accustomed to a situation and have a hard time changing. The market is asking people to suck it up and act like these past few years never happened, that buyers have to actually put money down in most cases, that sellers have to negotiate more, and that lenders will loan money at low rates to someone who can prove he/she should get that loan. This is requiring people be honest, save their money, and shop wisely for the future, not just the now.