Its interesting what you are doing with the form here. I am assuming when a user types some text it hides the mask. So here are some problems i could think with this interface,
1) Breaks convention, generally labels for form fields are placed either on top or the left of the field. By breaking this convention you are doing something the user is not expecting. Is it really worth saving screen real estate breaking the convention.
2) Is it universal, can you apply this format on different types of forms. Maybe here you can identify address field once you enter, but there might be cases where users have to refer to the fields to know what has been entered. This is especially true when you make this a readonly or view only form, what would you do then?
3) Accessibility, for users using different software like jaws, would it be accessible? For older users or users with low vision would the small text be readable?
4) Technology, What happens when the design breaks due to an old browser, would this degrade gracefully?
Its a long form don't take my word for it, test it with few users see if it has real value compared to going the traditional way. I would advise to do the normal left placement of labels.