[bluebeard]

The law of supply and demand doesn't necessarily apply. Companies seem to be fine with empty units since rates are so high, and the market seems to be regulated by algorithms based on my observation of daily price fluctuations. It is my personal opinion that the "law" of supply and demand is the biggest lie told in Economics 101, and is easily repeated to the point that people accept it as truth. The place I moved out of in Seattle saw a 30% rate hike as it was entering the shadow of a new apartment complex... which also killed the view. True value drops, price goes up. It's a regulated bubble. That's my experience.

[toasterlovin]

I think the standard caveat for most economic theories is "given enough time".

[peatmoss]

Yes. That, and a whole bunch of other caveats about market competition:

https://en.wikipedia.org/wiki/Perfect_competition

There's a storybook understanding of economics that pervades pop-culture and is dangerously okay-ish as a first approximation. Faith in the potential for free markets to exist can be a powerful force. Unfortunately, the conditions required to have a truly free market are pretty rare--and I'm most definitely not advocating for reflexive deregulation here.

When perfect market conditions don't exist, you can think of things like information asymmetries and transaction costs as economic friction. Sometimes that results in market lag. Sometimes, especially in big markets, that friction can lock big tectonic plates building pressure until something fails catastrophically.

As for housing in Seattle, additional supply is a good thing. It's not the only thing needed for near-term affordability, but it's one thing.

[WalterBright]

It always applies. The rate hike you saw was supported by an increase in demand relative to the supply. The new apt complex simply kept the price from rising even higher.

[emmelaich]

> "law" of supply and demand is the biggest lie told in Economics 101

The law of supply and demand cannot NOT apply. The relationship might be elastic or inelastic. The cause and the measure of supply and demand may be difficult to find.

But it cannot NOT apply.

[chillacy]

That's why you moved out of it, and if nobody wants to move into it, then the price will drop. Supply and demand are still setting prices, but its a bit of a dance.