It's exactly the other way around. "Paper wealth" is nothing, everyone can get enormous wealth by adding five zeros to the dollar bills. It has no relation to the real world means of production, to the GDP. If house prices lose 80% tomorrow all factories will be intact, all people will still have the same skills to perform their work. The impact would be artificial. On the other hand, not being able to find ample living space is a real problem and a drag on the economy.