A brief excerpt:
Almost a year ago I wrote: House Price Battle Royale: Low Inventory vs Affordability. Here is an update as the battle continues!
I’ve been wrestling with the impact on house prices of the rapid increase in mortgage rates and monthly payments over the last two years. My reaction was the current situation was somewhat similar to the 1978 to 1982 period and we would likely see prices decline in real terms (adjusted for inflation). See from March 2022: Housing: Don’t Compare the Current Housing Boom to the Bubble and Bust.
In that article I wrote on prices:
[W]e should expect something similar to the what happened in the late ‘70s – a decline in real house prices seems likely … Currently we just have to watch and wait. However, we can be fairly confident that we won’t see cascading nominal price declines like during the housing bust – since there will be few distressed sales.
In the 1980 period, nominal prices only declined slightly on a month-to-month basis a few times according to the Case-Shiller National house price index. However, real prices – adjusted for inflation – declined 10.7% from the peak. The inflation adjusted peak was in October 1979, and real prices didn’t exceed that peak until May 1986 (See from October 2022: House Prices: 7 Years in Purgatory).
There is much more in the article.