It might take people a while to realize their taxes changed but mortgage rates are instant. The loan you can afford on a given payment goes up and down with the rate without delay. Since most people go house shopping with a preapproved mortgage this has an immediate effect on the market price of houses.
This does not mean that RE prices react suddenly; it takes years, usually, and you see markets not clearing and inventory sitting around rather than price corrections. Otherwise there would have been plenty of RE steals to snatch up in 2008; yet, outside of one or two ridiculous areas, there weren't.
Funny to be downvoted for noting sticky prices. I don't make the rules!
