In a real estate market. "constrained supply", or rising real Long-Run Marginal Cost upward-sloping supply curve), is generally caused by:

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Scarcity of buildable land, whether due to geographic limitations (such as mountains, rivers, or oceans) or regulatory constraints (such as zoning laws, environmental protections, or building codes), can limit the availability of land for new construction. This scarcity can lead to a constrained supply in the real estate market, as it becomes more difficult and expensive to develop new properties, contributing to an upward-sloping long-run marginal cost curve.

In a Real Estate Market