Developers are pacing themselves now as the market has cooled a bit, however they know they must keep buying land and building for the future. This is why developers keep building. A smart developer knows how much to pay for land depending on market conditions, and how much absorption there is in the market. Absorption rates determine how much to build at a given time.
Because land and development takes time, builders and developers cannot rest as they would be caught short without property as many were the last housing boom.
Many predict the second half of 2006 and 2007 to be very good in real estate, and builders want to have available properties to build when it does get good again. This takes planning and foresight.