If the 2023 is really his contract at the moment then his price won't go down much next year. It'll be this year not next year if he end up at United. Next year other clubs like Barcelona will go for him due to their ageing attackers.
That's what I'm saying, though. Dortmund is in no need to sell right now, especially if prices are down/United want to haggle. Sancho is on a longterm contract, it's an unusual market this summer and as you say next year there might be way more clubs interested and willing to pay which will drive the price up instead of down like this summer.
I guess if United agree the 120m and Sancho pushes for a move, it might well happen, but don't think Dortmund are willing to lower their asking price as next summer there might ensue a bidding war for him and they don't need cash right now. It's better for them to keep their team together for next season instead of opting for the money rain.