Practically all housing development is financed with borrowed money against the property. Given the build-to rent model, the party at the end of the cashflow stream relies on rent checks being paid every month to remain solvent. When the rents stop being collected, at some critical point, some loan that is reliant upon that rental stream will default. When that happens, the properties are called in by the borrower and auctioned off at foreclosure.

Now yes, the major lenders, developers and speculators will spread their risk as much as possible by diversifying their portfolios and try not to be caught short by a problem in any specific market. But when there is a some kind of macroeconomic shock, ALL the markets will suddenly contract and be flooded with foreclosed properties and other rapidly depreciating assets. That's more-or-less what happened in 2007. Massive liquidity injections and historically low interest rates supposedly saved us from a prolonged financial catastrophe then - but there were still a LOT of foreclosures. I also think we are still seeing that situation playing out today. Current housing markets are unsustainable in a climate of higher interest rates. This will all come crashing down, probably sooner than most people expect. When it happens, it happens fast - and of course the reasons will seem obvious with hindsight.

By the way, perhaps you're being ironic - "This time is different" is the defining catchphrase when looking at historical financial crashes: https://www.economist.com/media/pdf/this-time-is-different-reinhart-e.pdf