Use of 'can' and 'potentially' both in the sentence is redundant.

B has odd construction, the first 'they' means 'depressed property values',

This is followed by 'their', usually this gives the impression that the same subject, 'they' is referred. Whereas, in this case, it is the object 'homeowners' who are referred.

This is done correctly in option A using whose which clearly refers to the Object.

Remember whose always refers to objects.

Other choices,
C has the same logic for elimination as B
D uses it, for a plural subject
E says that it can potentially devastrate homeowners, thus changing the meaning of the sentence, something that can be potentially devastrating might not necessarily potentially devastrate anyone, for that matter.

Crazy but thats GMAT English.