Assuming that this tax break translates into mortgage interest rate adjustments downward then this tax break will possibly help in the first time buyer segment of the market. 

As for the Monterey Peninsula I would suspect the relief will be moderately helpful in the entry level markets as most buyer’s are still looking at jumbo loans.  For the remainder of the buyer’s they are often trading one property for another or coming into the marketplace with a large amount of cash or substantial lines of credit.  

What seems most important to me is that the general feeling improves with regarding to real estate and the economy in general.  We all know that perception is reality ….. reality is that rates have been very good throughout the market shift and yet the feelings toward the market have been negative to say the least.