“Sharon’s having trouble selling their house – they’re dropping the price,” my wife noted, reading an email from an old college friend.

Those are words I haven’t heard in a decade. Definitely not since the implosion of the subprime mortgage market that helped bring on the Great Recession and one of the sharpest drops in home prices in the nation’s history.

Now Sharon happens to live in Australia, where home prices have begun a downward spiral after rising by more than 50 percent in Sydney and other major cities. But distance is not necessarily all that relevant today in an increasingly globalized real estate market.

Sure, home prices in the States may not have yet to gone into full retreat as they have Down Under, but signs of softening real estate market are mounting in the U.S. – and in the Boston area.

Greater Boston is among roughly half of nation’s major metro markets that are seeing a deceleration in the growth of home prices.

Boston-area home prices had risen by more than 19 percent through the end of September 2017, according to Attom Data Solutions. Fast forward a year and prices are still rising, but at a 2.3 percent rate, or roughly in line with inflation.

Scott Van Voorhis

While prices may still be rising, home sales are starting to go into reverse in Massachusetts, often the first sign of trouble in any real estate market. In the last downturn a decade ago, sales of homes and condominiums began to fall in 2005, several months before prices caught up and began to fall as well.

Then, as now, a shortage of homes and condos for sale was fingered as a culprit, and it is a very real issue. But prices had also risen to such levels that it outstripped the ability of many buyers to keep up, despite the explosion back in the mid-2000s of relatively easy to get, if hard to hang onto, subprime mortgages.

The subprime lenders are mostly gone and are not playing a big role in today’s market.

But the Fed, which until has helped blunt the impact of the latest round of runaway home prices by keeping interest rates artificially low, is now reversing course. And as mortgage rates rise, the unaffordability of so much of today’s real estate market to middle-class buyers will start to hit home, if it hasn’t already.

Massachusetts home sales fell 8 percent in September compared to the same period the year before, even as prices edged up 4.7 percent to just under $380,000, according to The Warren Group, publisher of Banker & Tradesman.

In the state’s highflying condo market, sales dropped by more than 14 percent, while the median price of a condo fell 3.8 percent to $328,000, the lowest price for September in three years.

Sales aren’t just dropping in the Bay State; nationally, home sales fell 3.4 percent in September, the latest decline in an emerging multi-month trend, the National Association of Realtors reports. Ominously, though sales declined, the number of unsold homes increased, raising questions about wavering demand.

Lessons from the Big Apple

The Big Apple offers a potential preview of where things might be headed over the next year or two here in Massachusetts and Greater Boston, which is consistently ranked as having some of the most expensive housing markets in the country.

Sales of Manhattan condos and co-ops fell 11 percent in the third quarter compared to the same period in 2017, while the median sales price dropped 4.5 percent to $1.1 million, according a report by Elliman.

The luxury market on Manhattan led the way down, with the median price for a high-end apartment falling 9.7 percent to $5.8 million.

And it’s not too little inventory that is behind the dropping sales – especially given the luxury tower building boom, which eclipses even that of Boston – but rather flagging demand as higher interest rates kick in. Inventory rose faster than sales fell, climbing by more than 13 percent over the quarter for the overall condo and co-op market and twice as high at the luxury end, which saw listings balloon by 27 percent.

Troubles at the top end are now filtering down to the rest of the market. The number of apartments and co-ops for sale overall rose 13 percent, with a 21 percent rise in the number of one-bedroom units for sale and a 15.5 percent increase in studios, The New York Times reports.

With its real estate market now officially in downturn mode, Australia may offer the clearest sneak peek at what may be in store for Boston and for the U.S. as a whole.

Home prices in Sydney and Melbourne soared so high that they landed on a list of the most unaffordable cities in the world, beating even London and New York.

As in the U.S., Australia’s central bank also hiked interest rates. Already confronted with prices that had outstripped paychecks, Australian buyers have begun to drop out of the market altogether after the loss of purchasing power that comes with higher rates.

Home prices are galloping downward in once high-demand Sydney and Melbourne at a blistering pace of $1,000 a week, according to a study by Deloitte, while home prices across Australia have been in retreat for a full year.

Australia could see a drop in real estate values of 10 to 15 percent over the next few years, wiping out $700 billion in wealth, a Morgan Stanley report finds.

When it comes to real estate, there’s one rule that applies to every market, wherever on the globe it’s located: What goes up must eventually come down.

That applies as equally to Greater Boston as it does to Sydney, London and New York. The question is not if, but when.

Scott Van Voorhis is Banker & Tradesman’s columnist; opinions expressed are his own. He may be reached at sbvanvoorhis@hotmail.com.