Homeowners aren't going to sell into a market with precipitously declining prices. The market will just freeze up. This is probably the primary reason house prices haven't adjusted. People who have low rates locked in aren't selling their houses to buy new houses, because they would be taking a huge loss to do so.

The only thing that's going to cause prices to drop are: rising interest rates + declining rental rates causing rental units to become unprofitable and go back on the market, or a wave of foreclosures, which seems unlikely given how many homes have very low rate mortgages right now. I don't think either of those are going to lead to a precipitous decline.