Neither party will have much direct effect on the bubble. Democrats are planning to let Bush tax cuts expire in 2010 (if not repeal them as soon as they take office). That will disproportionately hurt high-earners and drive home prices down. Democrats are also more likely to spend federal money to minimize foreclosure blight (which will probably be a huge problem in 2009 and beyond in hard-hit areas like Florida and Californian exurbs), that will be good for inventories and depress prices in the long run.
