I believe the calculations aren't quite correct. The return on the S&P is higher than the return on housing in a typical market. That's the whole point of the parent article. Consider a typical market like Chicago area. Prices still haven't recovered from the housing bust
If you look at historic trends, the housing burst and the drop and raise in home prices was specifically atypical -- you can pretty clearly see it on a graph. This abnormal behavior is why we have specifically given a name for it and why you and I both know exactly which housing burst we're talking about, otherwise it would just be the normal background trend.
The normal background trend is for home prices to rise at about the rate of inflation. We don't really have a special name for this other than "appreciating asset".
no, you are thinking about it wrong. housing as a whole rises at the rate of inflation. The particular house you purchase can easily rise not at the rate of inflation but less, due to depreciation and idiosyncratic factors. If you want to invest in housing, then buy reits or invest in private real estate funds. That doesn't have to involve buying a house. As to the bust, it is only atypical if you think about housing in isolation. If you think about it as just one of many assets trading in the economy, then you will realize that busts in asset prices occur all the time, so it's not some sort of one off that can never happen.
