This is a known simulator bug in FSX and P3D that happens when high resolution mesh is used. The mesh is what sets the height points under the landscape and the more detailed the mesh, the more accurate the lumps and bumps in the ground surface become. However, with a large autogen radius and a high detail mesh, the objects in the far distance get loaded and placed using the much lower resolution mesh. Once loaded, they are cached in that position and will remain there even when the higher resolutions kick in and pull down the terrain to its real detail level. This is only really a problem if you are flying very low and almost looking up at the buildings.
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