Rising interest rates don't have to force many people into a sale for the market to drop considerably. The market price is set by the balance between buyers and sellers and moderated by affordability. More buyers than sellers then prices tend to rise, more sellers than buyers prices fall. An interest rate rise will add a few forced sellers and reduce the financing level available to buyers. The buyers may also be hit with the tightening of credit worthiness requirements. Initially there will be a standoff and the time a property is on the market will increase until sellers expectations and desperation in the case of forced sellers lower prices to meet the reduced purchasing budgets of the buyers.
