A very effective guide for long term home values is actually median home price to income. Houses actually don’t gain in value over the long haul. Urban density and usage shifts can dramatically change the value of real-estate, but outside of that real estate is just a flat asset. Here is an academic paper showing the value of prime real estate in Amsterdam over a 400 year period, it's a break even proposition.
A home is only worth what people can afford to pay for it. If you can squeeze more people onto a given area of land and create more homes then you can maximize the value of the land such as in Manhattan over the last few decades.
Over time the utility function of real estate is scarcity relative to the available income of those seeking the homes. I mention this relative to an article posted in June 2007 which anticipated a 20% nationwide property decline using this metric.
New York City 2010
