I remember a couple years back there was a mechanic where there was only a limited amount of houses available for purchase at one time. If the stock ran out, no one could buy that type of house. I don’t remember whether it was for all house types or just for the late-game ones. Was there ever a mechanic like this or am I misremembering?

Yup, and it wasn't great for the economy xD

I think I understood the logic of it though. It gave people something to look forward to and save up for. The problem was that it had to be done manually by an admin, and Komodo was a busy guy so it was a very rare occurrence. So you had lots of players who wanted to sell their current house and buy a new one, but couldn't because there were no new houses available. And people in the endgame houses had no reason to sell their houses, so it caused major stagnation in the market.

If the intention is to give people something to look forward to, I think timed restocks could still work IF they were automatic and more frequent (like at least twice a month).

I do like the current arrangement though... xD