Zoopla said a key risk to overall sales volumes for 2023 is unrealistic seller expectations.
It said: “Serious sellers will need to ensure their home is competitively priced in order to secure a sale - however as the majority of homeowners have made sizeable gains in their home value over the pandemic, there is more room for realism on pricing.”
The report also highlights that the discounts to asking prices to achieve a sale widened quickly at the end of 2022 but said this gap is now holding at 3% to 4% and there is no sign of this worsening at this stage.
Zoopla said: “This is important because if this gap widens, sellers will feel under increasing pressure to reduce asking prices putting further downward pressure on headline prices.
“Additional modest price reductions are likely over the first quarter of 2023 as sellers continue to adjust asking prices in line with what buyers are prepared to pay.”
Zoopla’s data shows demand is up 10% on 2019 levels but remains 23% below the five-year average, while sales agreed are down 43%.
Read the full articles here Zoopla House Price Index and EstateAgentToday breaking news .