[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.