From Lost Fables Wiki
Livingwood is curious in that, unless burned, it refuses to die. There is a specific Truth which is known by the spring elves to make this type of wood take on a new shape, once it's cut, and the livingwood thereafter will grow into that shape, or regrow. The exception to this is flame or acid, both of which will well and truly kill the plant. In addition, inside a building made primarily (70%+) of livingwood, the speed at which living beings heal is doubled, and any Truth of healing is about 50% more effective.
Livingwood is not usually used for weaponry or armor, but rather tools which do not need to be particularly hard, and pieces of architecture. Both of these things have the extreme advantage that they will regenerate into the form which they have been magically shaped into, and thus require no maintenance, other than a bit of sunlight and some water now and then. If shaped normally, it is no better than average oak.
The vast majority of livingwood in the old world is in spring elven towns and cities, in their places of healing. Otherwise, it is very valued for bits of machinery such as mill wheels, which do not need to be extremely hard, but would benefit greatly from perpetual regeneration