This week, Blackstone has to limit requests to withdraw from its Real Estate Income Trust. Now that itself isn't all that significant. Real Estate Income Trust is a private real estate investment trust (meaning, it's not publicly traded, so you can't buy shares in your brokerage account), and these funds commonly place limits on redemptions.

Rather, what makes this a big deal is that investors are clearly not so enthusiastic about the state of the real estate market. Quite the contrary -- an uptick in redemption requests sends the message that investors are worried about real estate losing value in the near term.

There's already talk that the commercial real estate market could be in for a world of upheaval in 2023. But does that mean doom and gloom for residential real estate too? Not necessarily.

Even if home prices drop from their current levels, sellers still stand to profit nicely in 2023. And also, a decline in home prices won't necessarily spur a crisis that leaves a massive number of homeowners underwater on their mortgages. Home equity levels are still very high right now, so there's lots of room for them to drop without leaving property owners with negative equity.

Also, a lot of homeowners refinanced their home loans in 2020 when mortgage rates plunged to record lows. Those same homeowners are now looking at more affordable monthly housing payments, so it's unlikely that we're going to see a huge number of homes flood the market as property owners seek to get out.

All told, there's no need to assume the worst when it comes to both commercial and residential real estate in 2023. But investors, buyers, and sellers should of course keep tabs on the market and be prepared to act if real estate values start dropping at a more rapid pace than anticipated.

(Hal Turner Remarks: For all of the niceties mentioned by Blackstone above, they are now LIMITING WITHDRAWALS from the R.E.I.T. That, in and of itself, probably tells you all you need to know about the reality. It looks bad.)