1% is not really much of a drop in prices, MG.
I think you'll see that after a year or so of stagnant prices, a real measurable decline.
Fuel prices and the demand for raw material and resourses in China, will push the world enconomy into a recession soon enough, and then you will really see a real decline in real estate prices. And everything else, including stocks.
Here, in highly populated and developed areas, there's been a 20% or more drop.
I'm in the housing business and have been through this before. The difference this time is that interest rates are very low.
I don't think that building is a bad idea, as long as your son in law doesn't overpay for the land.
Raw land, in the right location, survives everything.