It won't go down by much but real estate is so much area and school dependent. It's possible to have the prices stable to increase in one part of the town and go down in another less desirable part of the town. One thing I learnt while house hunting, find a place with a lot of Asian population and prices rarely go down a lot. One of the reasons is Asians tend to save a larger part of their income, more conservative in house purchases so less chance of foreclosure. In addition, education is a huge priority so public school rankings stay strong which is a big predictor of house prices. Just my experience in a MCOL city in south.

Not here. The fed gov is never going to shrink, no matter which party is in control. There will always be lots of demand for housing here, especially inside the beltway and close to the metro.

Pretty much everywhere else? Yeah, prices will probably go down.

Unfortunately I think the logjam of people with low rates decreasing inventory is real and enduring.

But the government could come up with some program to mitigate the shortage or there could be another black swan event.