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Can you really be priced out forever?
Real estate agencies, mortgage brokers, and even individual house salesmen—with the full support of most mainstream media outlets—sometimes resort to using scare tactics to convince people to buy. The individual salesmen will hem and haw, claiming that they "don't talk people into buying," that they just "help them buy when they are ready," but the vast majority of them regularly misrepresent the strength of the housing market, and are willing participants in organizations that produce press releases and marketing material that is misleading at best, and outright deception at worst.
Chief among the scare tactics used by the real estate industry is the myth of being priced out forever. Their story goes a little something like this:
What house salesmen want you to believe:
1
The cost of homes is increasing much faster than your ability to pay. Home prices never decrease. This situation will continue forever.2
If you don't buy a house right now, then you 
A much more realistic scenario:
(one that has played out time and time again)
1
To be priced out of buying a home, prices would have to increase at a rate faster than income. Thanks to speculation and loose lending, this has indeed been the case for approximately the last five years. However, to be truly priced out forever it must remain true from now until judgment day.2
When potential homebuyers are priced out of the housing market, they have no choice but to rent, spending far less money than their endebted home-buying peers.
3
Rents must track with incomes, because no "creative" financing is available, nor are renters speculating on possible future returns. When incomes go down, rents either come down, or landlords lose their tenants.4
So... what happens when home- owners need to sell (because they're moving out of the area, or wish to upgrade to a larger house), but all of the potential first-time homebuyers have been priced out and are happily renting?
5
As long as prices remain high, people that were priced out will continue to rent (what other choice do they have?). Homeowners that must sell their house have no choice but to lower the price until a buyer can be found.6
As more people are priced out, more must-sell homeowners lower their prices. This begins a chain reaction, which causes people who bought on speculation ("investors" that don't necessarily need to sell) to begin to sell as well, out of fear that prices will drop even further.
7
With more and more people all trying to sell at once (both those that must sell and those that fear they must sell), prices are driven further down. The cycle continues until eventually prices have become reasonable again.