> In my market these are suburban tract housing generally at a sub-$500K price point with low-end construction materials and finishes. Thus, buyers say "there's nothing to buy" because they aren't the kind of houses they want.

There is something to buy, but there is nothing to buy at the price buyers want to pay. Developers can get away with less expensive finishes because they know demand is still so high relative to supply that the houses will still be sold.