Shares of Zillow dropped more than 7% to $3.00 recently , erasing roughly $400 million from it’s market cap , after the online real estate listing company forecast a larger than expected loss for the rest of the year.

Although predicted revenue was in line with analysts expectations, the company said it could lose as much as $40 million in 2017, significantly higher than the $600,000.00 in red ink Wall Street had been hoping for.

Zillow ,which runs brands such as Trulia and Street Easy , reported positive figures for unique monthly web traffic to its sites and beat revenue and adjusted earnings estimates, but investors seem ti be more focused on potential trouble on the horizon for Zillow, but also the Housing Market in general.

The Housing Market had a very strong 2016, but cooled off a bit as the year closed out. There were  5.45 million sales of existing homes last year , the highest level since 2006 , according to data from the National Association Of Realtors.

Existing home sales fell 2.8% in December toa a seasonally adjusted annual rate of 5.49 million. The regression meant total sales only rose 0.7% from the previous year.

Part of the decline for December can be linked to a drop in housing inventory, which fell 10.8% in December to 1.65 million homes on the market being the lowest level since NAR started tracking the supply of all housing types in 1999.

Higher mortgage rates would add another layer of cost to housing prices that already appear to be getting too high for many.

Add the uncertainty that Donald Trump’s presidency brings and the housing market may be one of the first dominoes to fall if the economy turns south.

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