[danans]

So what you are saying is that there is an enough of an increase of demand attributable to desirability of particular areas (Manhattan below 110th) that new construction does little to bring down high prices.

But without that new construction, those seemingly high prices would be even higher than they are now, unless you assume that the increase in demand is itself a byproduct of the new construction.

[ghaff]

Or housing prices end up at some upper level past which the market won't support. The same sort of effect has been observed with traffic capacity. Add capacity and you get more traffic but, generally speaking, people won't sit in traffic for 6 hours per day.

Obviously there is a correlation between supply and demand but there can also be a demand increases to meet supply effect up to a certain level.