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I mean scarcity defines value -- the reason gold or platinum are "valuable" is because of scarcity. That is it. Market inefficiency leads to unstable pricing, w

I mean scarcity defines value -- the reason gold or platinum are "valuable" is because of scarcity. That is it. Market inefficiency leads to unstable pricing, which for instance would be an "uncontrollably increase [of] the price." For given supply and demand if market was efficient the price of housing should have been a constant. I am guessing of course here there is an increase in demand also. (Which is what you perhaps you might mean as "scarcity?" Scarcity however has a separate definition.)

ehsankia 5y ago
Scarcity in my mind is a function of both supply and demand. Both low supply and high demand result in scarcity. In this case, supply and demand are both increasing, but one is way outpacing the other due to zoning laws. Even with perfect market efficiency, you still cannot make up for lack of supply caused by greedy home owners who don't allow any new constructions.