It's a bit of a ratchet. Once the prices go high, it's very hard to turn back. The only way out is probably to inflate the currency until a loaf of bread is $15 but housing is reasonable again, or for the state or federal government to offer some kind of huge tax write-off for depreciating home values. The latter is unlikely given the financial crunch faced by governments.

Perhaps it would be more accurate to say that they managed to crumble their economy which brought the value of housing down with it? They had a massive housing boom before the "Lost Decades". Japan is no stranger to asset prices rising out of control.

That said, when I have looked at Tokyo pricing it has always been in line with high priced North American cities, only configured differently. The difference in configuration means that the sticker price is often lower, but you are getting less for that lower price. Apples to apples the prices have always shown to be in the same ballpark.