I believe that some future home buyers will re-evaluate how much a home is worth and how much mortgage they should take on. So, yes in these cases the top home prices will fall or more likely not rise as fast.
I do not think this will be wide spread, for example many places have homes that will sell and mortgage for less than the allowed deduction. But at the same time, many people will (a) experience the standard deduction becoming larger than their total itemized deductions and therefore they will not itemize. and (b) the tax rates in general will fall making their overall tax lower. You should wait until they build these tax calculators (when the final bill is passed) and see then if it will affect you and/or your neighbors and how it will affect the overall property values in your local. What you are predicting may only affect the highest priced neighborhoods — do you live in one of these?
Why should the federal government penalize people for buying more expensive homes?
$500K may buy a mansion in Backwoods, Kentucky, but that only gets you a decent home in a nicer subdivision in many locations. This bill is more of the same old tired lie wrapped in shiny-new, Republican class-envy wrapping paper—it does nothing to reign in the EVER-GROWING FEDERAL SPENDING.