The Truth about the U.S. Housing Market

The Truth About the U.S. Housing Market - Seeking Alpha Recent research also indicates that house prices are more volatile, not just higher, in tightly regulated markets .... price bubbles are more likely to form in tightly regulated places, because the inelastic supply conditions that are created in part from strict local land-use regulation are an important factor in supporting ever larger price increases whenever demand is increasing.

.... It is more difficult for house prices to become too disconnected from their fundamental production costs in lightly regulated markets because significant new supply quickly dampens prices, thereby busting any illusions market participants might have about the potential for ever larger price increases.