Yes I understand all that. My point is that both supply and demand are low right now because you can't trade up in this market unless you can pay cash. But low supply eventually leads to increasing demand which pushes prices back up. It leads to increasing demand because it takes about a year to build a new house and it's likely that developers will start fewer homes in the upcoming year due to increased rates, which mean they can't make their required profit unless prices go up.

I also understand that current sales will sell for less because there is less demand. That's why I mentioned that sales comps will be pegged to the few transactions that occur. But you have to look at the number of transactions, not just the most recent prices. In real estate you have a price cycle but also a volume cycle. Fewer transactions occur at low prices because sellers don't want to sell when prices are low. The exception would be if many people are forced to sell because they can't make their mortgage payments, but that doesn't appear likely at the moment.