I'd posit it's hard to know what the dynamic would be. Consider certain luxury goods (https://en.wikipedia.org/wiki/Veblen_good) where increasing the price increases the demand. (Conveniently, economists have a model and also a name for things that don't follow the model. The universe can be divided into bananas and non-bananas.)

Cleveland isn't a prestigious world-class city attractive to the wealthy, but if new luxury condos in a tier-1 city come online, it may induce demand from wealthy/speculators who would not otherwise have considered that city, or were picking between alternatives. (Investment, signaling/status-seeking, etc.)

Treated as an investment vehicle, increasing supply (e.g., having an IPO where no shares existed before) can unlock latent demand (people divert income into that investment and drive up the price). Perhaps housing needs to be modeled as a mix of investment, local demand for shelter, status symbol, tax haven, political baton (keeping existing homeowners above water), etc.

Again, not sure how housing actually behaves but it seems complex enough to defy my econ 101 understanding.