YDM, I'm not too sure you can start on timeline on housing using 1950 as a starting point. Houses built in 1950 were probably 67% smaller in size than the McMansions of today. I remember my parents being elated when purchasing a 4 bedroom two story castle with 1650 square feet for a family of 8. I suspect comparing pre-1980 housing to today's housing is like comparing apples to oranges.
In any event, I agree that markets tend to over correct and the housing market will be no exception. Throw in the law of supply and demand with the overhang of foreclosures in the supply chain and the path for housing prices is likely to be pointing lower for some time to come.
By the by, if your interested in listening to a very intellectually stimulating lecture from an articulate historian/economist, then you might enjoy Niall Ferguson's lecture (also furnished by Zerohedge) He discusses the fall of empires focusing on the U.S. as well as the time it might take for such a fall.
As boomers retire, the pressure on the 1650 square foot home returns--around 2014. A new crop of McMansioneers will float those boats out the door, and compression between a 1650 square foot house will be $400 to the McMansion 3200 square footer, and all the additional upkeep costs, like inferior construction.
You can't get a home built 16 inches on center with 18 inch real wood joists after 1964 in my neighborhood--the thirty year old homes are crumbling, the 50 year old smaller homes, not a eyeball catching, but rocks.
Again, you can outsmart yourself here, but I perceive by the 2016 time frame, we will see compression, and regression to the mean in the modern era post WWII will begin again.