It will start with the new houses... The builders have to sell, so new house prices will drop first. Then when existing home owners see the prices of new houses dropping, they will rush onto the market and try and get out before everyone else does.

People need to consider however, if they sell, they also need to take into account the mortgage rate they will be able to obtain. They may be on a significantly lower interest rate than they can obtain now, so even if houses prices drop, they may not end up in a better financial position.