Yes they can change. It happened near me in the last bust. They were building a tract of 3000sf~4000sf Mcmansion (those qualified as mansions in the late 80s). When the bust hit and those monsters stopped selling they started building 900sf~1600sf crackerboxes. There were blocks where the first few homes were big monsters and then the rest were little tiny dollhouses. Of course there were pissed off homeowners and lawsuits, but that did not stop the builder. This was in a master planned community with strict HOAs.

They also built a big condo complex in the same area and sales were so bad that after a year they ended up turning it into an apartment complex. Angry homeowners nearly strung up the city council but it did not change the outcome.