I'd be interested to see projections of earthquake casualties before and after this increase in housing density.
But realistically, at this point I'd expect investors to circle the aftermath like vultures waiting to throw money at whatever they could. There might be a small downturn, but then things will get right back up there.
My hypothesis is that it would only slightly dent demand for the area. And that says nothing about all the single story wood-framed ranches in the Peninsula which would largely be fine.