This has already started in some of the most overinflated areas. When this becomes widespread owning property will be a liability. Owing debt with property as collateral will be financially ruining for most of the middle class.
It is interesting that Bezos' "your margin is my opportunity" nor Andreessen's "software eats the world" has yet to discount real estate valuations.
The rational emergent response from young generations is to reject conventions surrounding real estate, as that entire ecosystem is completely unsustainable for the majority of the population. The young generations have been completely shafted on real estate.
Generally, the younger generations are completely screwed if they try to fit within the SFH model. To just survive, they'll probably need to start thinking in terms like "individual/single-family model of living is monetizing my distrust of peers", finding like-minded to group together and re-capture cost-efficiencies of scale for themselves.
I've long wanted to find a tract of 16 ha / 40 acre to experiment with integrating a number of ideas I've seen floating around the net. Lstiburek-grade building envelopes, combined package/people PRT, centralized laundry and food services, on-site food forest production, waste stream co-generation, etc. All to work out the details of answering the question, "what is the absolute minimum number of people, minimum de-centralized organization, minimum processes and minimum automated tech tree needed to replace 80-90% of what we normally pay retail for, with wholesale/distributor costs?"
I'd like to see for example, what would happen if people with less financially-remunerative prospects but with a good work ethic were made a contractual promise: you put in your time helping those with better financially-remunerative prospects with tasks that we can't automate yet, like housekeeping and grounds maintenance, and you'll get treated with respect and dignity, have the same educational and medical services for your children as theirs, won't get taxed out of your living quarters in your old age, and be cared for within the same community in your old age (mixing it up with the toddlers and kids at first, then receiving hospice care for example by trained teenagers in later stages when warranted).
In general, I've long thought it really weird that the incentive structures nominally put in place and heavily promoted to us drive us apart where we're easy financial pickings for large, organized institutions, instead of driving us together and funnel compounding interest valuations of the group's network effects into the group's benefit instead of shipping it outside of the group. I strongly suspect dominant cultural factors obscure the recognition of those emergent network effects, and the drive to assign monetary valuations upon many factors is leading to bad abstractions from lossy information transfer. But realistically, maybe I'm just doomed to figure out via defeat in detail why homo sapiens sapiens in general cannot be trusted, as this is all too hand-wavy at this time for my taste.
What's the mechanism you're thinking will cause this? Based on what you've said, I can imagine you're thinking either a crash in property values that leaves people underwater on their debt or widespread property damage by people that have 'stopped respecting property law'.
Regarding theft/violence/vandalism, it can happen just as easily to a home you rent as to a home you "own". Regarding property value declines, any decline that's financially ruinous is going to ruin _someone_, and the debate then becomes who's left holding the bag when it happens and how that negative impact propagates outward through the broader economy.
(But I'd be interested to hear more of your point of view.)