Why doesn't the land bank just use all their money and demolish a lot of houses. On the supply and demand diagram we saw in class on Thursday. While the demand for housing is dropping, the supply is fixed or perhaps growing slightly. To fix the market, the supply needs to be adjusted, this can only happen if we destroy broken down homes. Building new homes just seems like a waste of money. This is how I see the problem, but maybe I am overlooking something important. help me out!