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Did any part of the construction industry escape the bubble burst?

What caused the construction bubble to form and ultimately burst?

Green buildings are pulling their weight, but the green design and construction industries would, of course, be a lot better off if that whole Great Recession thing never happened. The unprecedented real estate bubble began to deflate in 2006 and 2007, taking with it millions of people's homes and jobs, and it's only now beginning to recover.

So whom can we blame for this mess? There's no shortage of people and institutions you can point the finger at, including the Federal Reserve System, Wall Street bankers, housing developers and even homebuyers.

In the first few years of the 21st century, housing markets across the globe became highly speculative. Interest rates were kept at historically low levels, encouraging people to borrow more and more money. Others began to view property as a safer investment than stocks [source: The Economist]. People started buying property as an investment, rather than as a place to live. A study by the National Association of Realtors found that a full 23 percent of all American houses bought in 2004 were purchased as investment properties. Large numbers of Americans also bought homes to "flip" them (i.e. resell them at a higher price) [source: Christie].

Meanwhile, bankers got in on the madness by inventing complicated securities based on mortgages. They were allowed to dream up these newfangled investments because in recent decades the U.S. Congress rolled back Great Depression-era financial regulations meant to prevent this exact sort of problem [source: Leonhardt].

All of this prompted an unprecedented exuberance among real estate developers, fueling one of the biggest construction booms the country has ever seen. In cities across the U.S., construction cranes dotted the skyline, building shiny new condo towers based on artificial demand. In the far-flung suburbs of places like Phoenix, California and Florida, homebuilders built new homes as fast as they could. And while the real estate market as a whole fell off a cliff in 2007, the more specialized green building industry continued humming right along.