The housing market's falling! The housing market's falling!

Perhaps I'm being stupid or overly optimistic, but here's why I'm not panicking...

Say you bought a house about 3 years ago, at the height of the housing boom. You thought it'd be a smart investment. Interest rates were low, so you bought in.

But, you were smart about it. You did your homework by using one of the many online tools that took housing cost + interest rate and gave you an idea of your monthly payments, so when the mortgage company told you that you were approved up to $300,000 -you knew you'd be looking for something that was about half that in order to keep your mortgage payments closer to what you were already (easily) paying in rent soas not to have to change your lifestyle to afford the house.

So, you ended up buying a home for $185,000. Then the housing market fails. Homes are going for about 25% less than they were when you bought in. Your house value plummets to $136,500 in 5 years when you go to sell your home to move into a home in the same town, but with a bigger garage so your WIFE can work on HER car in the comfort of an enclosed, temperature-controlled environment as well. **Cough**, right, let's move on... Yes, so you sell your house for $136,500. Ooh, rough break, right?

So, you take your $136,500 and you buy into a house for $185,000 again. Doh! Back where you started, right? Nope. Because the housing market fell 25%, you bought into a home that was worth $231,000 before the housing market fell.

My point is, if you own 1 house that you live in (it's not an investment), then it doesn't really matter what the housing market does because whatever your house is worth, as long as you move right into another house, your housing dollar should be roughly equal when you buy as it is when you sell. In other words, when you're selling and immediately buying again, then it doesn't matter if it's a "buyer's market" or a "seller's market" -you'll always get screwed on one end or the other!

(**I am not a real estate agent. I may just be justifying the fact that I bought into a house just a few years ago. I could be totally wrong about the way the housing market works. If you make any decisions based on this blog article, it'd be incredibly stupid.**)