One thing that doesn't seem to have been mentioned is that median household earnings will always be an anchor for housing prices. The house where I currently live has appreciated 10 times its original purchase price in the last 25 years. That equates to an annual growth rate of approximately 10%. However it would be naive to project this growth rate into the future. Over the same timeframe the house has risen from 7x average earnings to 26x average earnings. At the same expansion rate, in another 25 years it would be selling for approximately 100x average earnings which is quite ludicrous.
