Demand pressure, not supply inelasticity, explains coastal markets' high price volatility relative to other US markets in the housing cycle of 1998 through 2009. Relative to a comparison group of more elastically supplied markets facing similar historical demand pressure, coastal markets saw...

There is no evidence that differences in supply elasticity caused cross sectional variation among US housing markets in the severity of the 2000s housing cycle. This is true in three sets of empirical specifications: a first that assumes identical demand changes in the 2000s across markets, a...