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gwern comments on Open Thread, June 2-15, 2013 - Less Wrong Discussion
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But it can also fall, as we witnessed not too many years ago... Any speculation on real estate will already have been priced in and the expected profit from buying a house minimal.
To borrow your phrasing - in a competitive and efficient market, the expected profit from buying a house is equal to the risk-free interest rate. So my math actually was rather bogus - I should have talked about how the landlord should expect his $20k equity stake to appreciate at the risk-free interest rate (~2%), which would shave $400/year off the amount of collected rent needed to justify the house price in the first place.