[lds23]

Intangibles aside (physical security, community, schools, etc.) IMHO housing is still a good investment - it may bobble a bit, but long term it's likely to increase, if only looking at demographics.

At least I hope so, considering I'm buying a house next month!

[eno_]

As long as you don't buy a house that is very much more expensive than what it would cost to build (minus land cost), or is in an area that could have a local economic slump, you will be fine.

If you buy a $900,000 three bedroom split in a boomtown, you are in danger of taking a $700,000 hit when the bust comes.

If housing prices do start to fall, it will be a long and painful slide like in Japan, not a crash.

[eno_]

Also, like most things, once the articles get written about how housing prices have gone up, the best of the boom is over. To find really outstanding ROI, you have to go to Eastern Europe or to resort areas that fit changing travel (more regional) plans.

[rohry]

"Almost everywhere, house prices continue to outpace inflation. The exceptions are Japan, where house prices are now in their 11th year of decline, and Germany, where prices have been more or less flat since 1992."

The reason for Japan's decline is that they had their bubble in stocks and real estate in the 1980's. The reason in Germany is because they don't offer long-term mortgages on real estate. They have short term "balloon" mortgages which have to be rolled over every five years.

[speekinout]

If you're buying a house that you could comfortably live in for the next 10 years or so, you can't go wrong. With a 30 year cheap mortgage, the cost will probably only go up negligibly (taxes).
Some small towns turn into "ghost towns" where the houses wind up valueless, but that is the exception. Most houses grow in value.