1. That’s not strictly true. Masonry construction isn’t impossible in earthquake regions, but it can’t be very tall and has to be reinforced. The details depend on the jurisdiction and building code. As an example consider the vast number of cinderblock commercial and light industrial buildings (mostly 1-2 story) throughout California.

2. Earthquake prone areas are a minority of the surface area of the earth. Suppose just the non-earthquake prone areas shifted significantly toward local masonry as a building material, that should still greatly reduce supply pressure for lumber.