In the short term, I believe the lower to middle end of the housing market will see some softening. Higher interest rates, FHA tightening, and the end of the $8k federal tax credit may all work against this market.
We might possibly see a bit more inventory out there as well.
However, there are a lot of buyers delaying their purchases to qualify for both the California tax credit and the federal tax credit. This is going to make the early May numbers look fantastically good. The May numbers will mostly be reported in June. It won’t be until July or August that we see what the market looks like with a little less intervention.
(Edit: In this case “short term” means 3-6 months, not one month or several weeks.)
