This probably depends on where you live. I've seen some relatively cheaper housing in Arizona and Florida. Housing in the DMV is still high but much lower than it used to be. There are some places where the average home was $120,000 to $150,00 about 10 years ago. Now, it is almost impossible to find a house for under $200,000 even old homes are listed for that much.

That's a substantial increase in a down payment in this shaky labor market and wage increases have been small.

Then there's a glut of partially completed subdivisions that may never be completed and result in the home depreciating which is something that I would think was previously unheard of.

A housing recovery? That's just the impact of no foreclosures for a year, as the The banks spent that time putting their legal ducks in a row. But now foreclosures are once again on the rise, as the banks ramp up their infernal foreclosure machines once again, throwing more homes on the market through increased foreclosures, distressed sales, short sales, walkaways, etc. That will put more downward pressure on the housing market. Add to that the persistent unemployment, continued tight credit and what do you get?

Prior to the FIRE economy and the use of housing debt to make up for falling wages, home prices were about 2.4X the home buyer's income. The reason for that is that banks, when they have to hold on to the loans and actually want to be repaid, won't lend a family more than that, because the family can't afford the payments on more than that. So, if the median family income is now about $48,000, then the median family home should cost about $115,000. When prices drop below that, then housing will be cheap. Presently, they're about 3.6X, down from 4.2X in 2006, but they still have a ways to fall yet. As Hudson says about Greece, debts that can't be paid, won't be paid.

My father, who is 86, lived through the depression, and retired from investing, told me when house prices were going up, that house prices can fall, too. A house is not an investment, he said. When he told me that, I, in my ignorance, had a hard time believing him.
So what sets the price on a small piece of land with a pile of timber on it, that needs constant maintenance and is heavily taxed every year? Supply and demand. And right now, it seems to me that the supply of houses far exceeds the demand from people who are both willing and able to pay for them, at the present asking prices.
Wake me when that changes.

In my area (Rochester, MN), I notice that the residential real estate market is changing. The most important change that I notice is that homes sell quicker. That is good news for sellers. I have looked at recent sales here and without doing a rigorous analysis, recent sale prices are mixed -- some higher than I expected and others lower. My impression is that some sellers have marketed their homes better than others (updates, repairs, etc.) and their homes sell faster and at higher prices. Residential real estate tax values of homes have generally declined. There seem to be more new construction homes on the market this year than in recent years.

The real estate market here has not yet "recovered". The distress is evident. One house nearby has been on the market for several months and the sellers have reduced their price several times. My opinion is that it needs updating and was offered at an above market price and that any interested buyer will wait in hopes of a better price. Another house nearby is in foreclosure. My impression is that we remain in a buyer's market with demand increasing but still weak.

Does the 100 year history really matter. Over the last 100 years productivity with respect to building houses has improved and land on which to build has become more scarce. These have roughly balanced, but why should we expect that to continue?