I second this. Land is not naturally scarce. What is scarce is land near good jobs. I believe one of the major drivers of housing prices is the ratio of jobs to housing in a given area. In parts of San Francisco the ratio of jobs to houses is as high as 4:1 [1]. Nearly everyone wants to live close to their job, so the houses are priced to price out over most of the people who work in a given area. The housing becomes prices at the maximum load the top n buyers can manage. Imagine if the ratio swung the other way with an oversupply of houses, created by either relocating jobs or building new units. The prices would fall drastically until they approach the cost of construction.
[1]: https://www.bloomberg.com/news/articles/2018-03-05/in-califo...