I think the single most important factor, besides psychological trauma, is insurance. If insurance rates jump up by a factor of 10, definitely there will be a serious impact on prices. Even more if insurance simply becomes unavailable for certain areas. Nothing to kill values faster than the knowledge that one can’t get insurance. The Billion $ loss has to come from somewhere, and the most likely place is insurance premiums. If the $1000 p.a. premium jumps to $10,000 p.a., a lot of potential homebuyers suddenly can’t afford to buy anymore.
