Note in the early 90's the housing prices collapsed (courtesy of the 1987 tax changes, which led to the S&L collapse.) Also, we had a recession in 1991, thanks to a tax increase. Yet the stock market climbed for 10 years to 2000. This does not indicate a cause effect relationship, as implied by that chart.
We bought our 2nd house in 1988 for $73,000 in Peoria. The market here was just picking up after a locally depressed economy. The house has more than doubled in value since then (4 bedrooms plus a family room on a 1/4 acre). We've refinanced twice, paying for a new roof and furnace, the last time getting a 15 year fixed rate loan at less than 5%. We have 11-12 years left on that.
As an earlier poster said, real estate is all location. If it's prime location, the value will not go down. If it's not prime location, it may go down--it depends upon the general economy. After the extreme run up of the last few years, real estate prices are due to level off for a while. I don't expect a "bubble" to burst and cause a recession, as this author seems to think.