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I think for that to happen you need a lot of sellers. To get sellers ... I fear we're going to need to see a lot of layoffs first :(

Uncertainty has spiked. People refrain from making big decisions like moving in these conditions.

People are hunkering down. Cutting spending, staying put, watching for their jobs. Moving is expensive so it’s likely to be delayed.

If it dips too much that means interest rates will go lower, which will fuel another round of inflating real estate.

Wouldn’t housing prices decrease be a major downward pressure on inflation?

1/3 of the CPI is calculated using the rent variation smoothed in the last 6 months - which is not too elastic due to lease agreements. So it wouldn't be a major downward pressure.

real estate prices hella depend on mortgage interest costs, because you bid based on what your can borrow.

If consumers are less confident about borrowing large amounts, or if banks stop lending freely, then house prices will drop.