Can only speak to my locality (Norfolk/Va Beach) but there is stupid low inventory right now here.
Some of it is fear of "people with covid being in my house looking at it" which had about 30% of my wife's listings drop or become unshowable. But we are in an area that people still move in and out of (heavy military presence, 3-4 years average time on station) and a few corporate HQs with people always moving in and out.
Anything on the market, that is priced around market will sell within a week. My rental sold in 3 hours, with a bidding war.
Selling the rental was easy. I too was expecting a major correction and wanted out before that hit. Got F'ed with that in Jacksonville in the 06-08 crash. Problem is, if I sell my main house to cut expenses, not much to buy. And certainly none of it would be a cost savings.
We have enough people coming in with steady gov't or high enough up in the corporate structure they don't get laid off, checks. We do have the second highest percentage of people in the US for a metro that have their checks come from FedGov, just behind DC, so it is semi insulated here, because so many of the people are in jobs that won't go away short of the USA ceasing to exist as a political entity.
My basic plan if the market tanks here hard, and I still have a job, is to just ride it out. I'm a block from the bay, I have a dock, my area will be one of the first for housing prices to recover unlike cookie cutter subdivision #844 that only justifies the price because local HS and ES are A rated.
If the economy tanks hard, I'm going to learn from my parents, and if there is no prayer of getting out of the house clean, and I have no income beyond unemployment and VA disability coming in and no prospects of that changing, say we hit a 1930s level depression, or worse, I will just sit on what liquid assets I have and let the bank take it..
In the 08 crash, my dad became very ill, lost his medical, (no major airline style decent disability) and their farm that was worth $800k that was mortgaged for $600k, became worth $400k overnight. They blew through all their savings, both normal and retirement, only to delay the inevitable foreclosure by 18 months, and were instead **** broke living with me at the end of it.. Only so Bank Of America would lose less money (and get a govt bailout anyway)