Correct, and be aware that pricing generally has momentum. Increases on prices put pressure on buyers to bid higher, and sellers to hold out for more.
Sudden decreases put pressure on buyers to hold off (it will be cheaper next year), and sellers to either hold off on selling (we’ll wait for the next boom), or in rare cases panic sell ASAP if they need to liquidate due to some weird life circumstance (divorce, death, unexpected emergency move and can’t afford to keep it, etc).
So price decreases are likely to have two different types of effects depending on the ‘part of town’ you’re looking at.
The rich part can wait out boom/bust cycles (generally), so inventory will dry up and prices will stay high because no one will be forced to sell and take a loss - but most potential buyers will also be less willing to buy as the prices are even more ridiculous (relatively) than they were before.
The poor part of town will have significant inventory increases and major price drops, as people have to sell more often due to job changes, financial hits, etc.
Overall sales volume will drop across the board, as financing is harder to get - which it being easier is really what caused the boom, and it being harder is causing these overall shifts too.
Modulo local market factors of course.
Sudden decreases put pressure on buyers to hold off (it will be cheaper next year), and sellers to either hold off on selling (we’ll wait for the next boom), or in rare cases panic sell ASAP if they need to liquidate due to some weird life circumstance (divorce, death, unexpected emergency move and can’t afford to keep it, etc).
So price decreases are likely to have two different types of effects depending on the ‘part of town’ you’re looking at.
The rich part can wait out boom/bust cycles (generally), so inventory will dry up and prices will stay high because no one will be forced to sell and take a loss - but most potential buyers will also be less willing to buy as the prices are even more ridiculous (relatively) than they were before.
The poor part of town will have significant inventory increases and major price drops, as people have to sell more often due to job changes, financial hits, etc.
Overall sales volume will drop across the board, as financing is harder to get - which it being easier is really what caused the boom, and it being harder is causing these overall shifts too.
Modulo local market factors of course.