Housing prices likely to stay stagnant?

I’ve been trying to make time to post this for some time, but, lacking said time am going to post it anyway.

This story in the NYTimes states that, in the words of an off-blog tipster:

(Housing) Prices go up and down, but over long periods they stay essentially the same, adjusted for inflation.  Which, frankly, makes sense to me — there is nothing particularly about a house that suggests its value should grow over the long term.  It’s just building materials, and if the supply of same is sufficiently elastic, then the asset should pretty much keep up with inflation and nothing more.

As a commenter says here,

Buildings do not appreciate, unless they are made primarily of some material that is both prized and no longer available for some reason. They depreciate, at about 1.5% per year. They can never be worth more than the cost to recreate them today, less depreciation.

Further evidence that focusing on the intrinsic value of residential real estate? Proof that there is more to buying and selling houses than meets the eye?

The study is here (pdf).

A longer article about the long term housing market referencing Piet Eicholtz is here (archived: 2009).

As an aside, I’d like to get paid to study the papers here (archived: 2014). 🙂