I gave a talk at the San Francisco Federal Reserve Bank yesterday and something that came up concerned the impact of land use controls on fluctuations in prices. Conventional wisdom is that more restrictive supply leads to greater price fluctuations. So, if you take San Fran (with very restrictive land use) and compare it to Columbus OH (with plenty of open land) you see price fluctuations around trend that are far more marked for San Fran.
But some of the highest price falls in the US have been seen in places (like Las Vegas) that have seen huge building booms. Presumably this is because housing supply is inelastic once houses are built (unless you knock them down again) but I am not totally clear why this should have lead to larger house price falls in those markets (unless speculative demand played more of a role there than elsewhere and that component of demand has now collapsed).
[Thanks to Christian Hilber for the figures]