It probably still applies in terms of peoples ability to service the illusion of home ownership. It does not apply in that its corollary to predict foreclosures has proven to be somewhat problematic.

Way back when, we all just assumed to rule of law applied, banks would foreclose and prices would decline. Well, we were (those of use who so believed) wrong.

It turns out that while the foreclosure numbers are staggeringly high, at least in San Diego that has not translated into improved market conditions and or affordability.