Many key markets (especially on the West Coast and Phoenix) are way over-valued. A 30% correction would be expected in the unemployment rate goes up in any significant manner. The price increases in the last two years are not reasonable nor supported.
If I were looking to buy, I’d wait until at least next Spring, otherwise you will overpay (significantly in some markets).
Unless there’s an actual bust, it will take longer than 1 year to deflate the housing bubble. We’ll see but a lot of people are in their homes with low 30 year fixed rates. If they can make the payments they are fine unless they have to sell.
One of the reasons housing prices aren’t declining faster is simply that there isn’t a big supply of homes available. Simple economics. When the rates were very low and the government was handing out money (Californians during Covid were collecting $1000 a week in unemployment - $600 from the feds and $300-$400 from the state). Not bad for a small blue collar family. Housing prices went straight up when the economy was shut down... go figure.