Yes, I certainly think the psychological side of things helps projects that don't make sense get built. Like my neighbors, who prepared to sell their house to move across state for a job, then didn't take the job - but put their house up for sale anyways, "because we'd gotten so used to the idea".

Besides, there are the occasional reports that the rental market is doing better than in the past - because foreclosures, etc, are pushing people out of the ownership market. Is that a trend I'd want to hang a major rental housing development project on? Not at all. (But then, I'm not a developer, and maybe this is why.)