Nationwide Housing prices do rise and drop, adjusted to inflation, according to The Social Atom:

"…House prices are now set to fall, as the New York Times reports. That's not really so interesting; more interesting is the human dynamics behind the story. "Many government officials and housing-industry executives,"the article reports, "had said that a nationwide decline would never happen." On what possible grounds? If you suspect some conflicts of interest, I think you wouldn't be too far wrong."

A video is presented (below) that shows how Housing Prices, adjusting for inflation, have gone up and down over the last 100 years – contrary to what we've been told by Ben Bernanke and others.  I've also written about this recently in Real Estate Mass Psychology – Seth Godin and subprime lending, James J. Cramer's Bloody and Bloodier sub prime crisis.