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Inflation-adjusted house prices in the US increased by an average of 0.7% per year between 1940 and 2004 (and that includes most of the 2001-2005 period when prices in some place began to rocket). Over the previous 50 years the real increase in prices was even lower.
In other words, anyone who wants to believe that within the next couple of years prices will not generally return to "normal" levels, is effectively proposing that a 100-year trend has been replaced by something totally different. Anything is possible, but it seems to me that such sudden and dramatic change is far more in need of solid justification, than the more credible notion that we have witnessed a hysteria-driven bubble.
Not only that, but if changes on this scale are to prove sustainable, the economic indicators should be loud and clear. But even those with a vested interest in talking up the housing market seem to have problems identifying any such indicators. What we are hearing instead is exactly the same kind of waffle and wishful thinking which preceeded the dot-com crash and I imagine, other bursting bubbles in the past.
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