Obviously we would be seeing more #’s of foreclosures and defaults. However the fact remains that home prices will continue to trend towards the long term median line putting home prices more in line with incomes. It might take a little longer but it will get there. The market is too big to force one direction or another over the long term.
With that said this program IS creating a whole lot of people in debtors prison holding mortgages to homes that are worth less than what they owe. I, for one, feel fortunate to not have a mortgage hanging over my head.
I will say that I continue to look at homes in the markets I want to buy in (Mission Hills, Hillcrest, North Park, Point Loma) and am seeing a definite decrease in housing values which is good to see.