Is the housing gold rush finally over?

The New York Times reports that housing prices will eventually recover, but the era of housing as a profitable investment may be gone for good:

“There is no iron law that real estate must appreciate,” said Stan Humphries, chief economist for the real estate site Zillow. “All those theories advanced during the boom about why housing is special — that more people are choosing to spend more on housing, that more people are moving to the coasts, that we were running out of usable land — didn’t hold up.”

Instead, Mr. Humphries and other economists say, housing values will only keep up with inflation. A home will return the money an owner puts in each month, but will not multiply the investment.

With many South Koreans having gotten rich through luck and/or skilled real estate investment — Beverly Hillbillie-esque cholbu was how the ROK's nouveau-riche were once derided — one wonders if this applies to South Korea as well.

The ROK population is growing, with an influx of foreign nationals offsetting the lack of two-, three-, or four-child homes, but is it at a rate that goes hand in hand with supply? Certainly there is demand for better housing, as people raze or vacate old homes (in rapidly developing Korea, read that as more than fifteen years old) in favor of something bigger and flashier, and that might keep prices going up and up.

I've been hearing about housing bubbles for years, but (knock on wood) they don't seem to burst like I've seen in California or elsewhere in the US. Except Hawaii, where housing barely dipped a blip during the meltdown. Could the land-scarce Aloha State be a better analogy for the land-scarce Land of Morning Calm?

With South Korean nationals recently allowed by the ROK government to invest up to $1 million in property overseas, the investment engine that drove real estate prices up may see a bit of deceleration. Not completely, mind you.

Just some thoughts. I'm not an economist, but I play one on TV.