Readers suggested a topic on circumstance and the housing bubble. "I was wondering, what would we all be saying if the shoe was on the other foot? By that I mean what if those of us who are currently renting due to the insanity of home prices had bought a home pre-bubble? (I am a renter). Would we have the same opinions about the 'paper gains,' and be so adamant that sellers lower their prices if it was our home equity on the line?"

"I know that many of us would like prices to fall big time so that we can finally achieve our dream of homeownership (or get back in a home if you sold out to take your gains during the bubble). But I found myself thinking today, would I feel the same way about the housing bubble if I had bought a home for $200K several years ago, that at the height of the bubble was worth $700K and is now worth $500K because of the bursting of the bubble?"

"I told myself that I would have the same opinions because I view a house as just someplace to live, not an investment or piggy bank, and having a paid-for home is a major part of my retirement plan. Therefore, whether my home was worth $200K, $500K, or $0K, it shouldn’t matter if I truly hold that view."

"But I don’t know. It’s easy for me to sit here and be irritated at a seller who refuses to let go of his/her notions of their home’s 'value,' but what if it were me?"

"I guess what I’m trying to determine is, are people like those here (fiscally responsible, prudent, forward-looking, self-controlled, didn’t buy more home than they could afford, didn’t HELOC, bought home just to live in it, etc.) who own a home, just calmly sitting by watching all their equity go up in smoke and shrugging their shoulders? Or are they feeling some dismay even though they won’t be losing their homes, don’t have to sell, etc.? If you were never going to use the equity it shouldn’t matter, no?"

A reply, "Actually, if you owned a house pre-bubble AND did not HELOC it AND do not plan to sell it and move out of San Diego (for example) AND have any need for a move up house - i.e. growing family, nicer neighborhood, closer to the ocean - you are much better off if prices fall."

"I.e. you bought a $100,000 house that went to $400,000 but wanted to move up to an $800,000 house. If prices stayed the same (all loans at 7% - all equity used for new purchase) You are looking at a $300,000 down and $500,000 loan for $3,307/mo. plus $733 for taxes = 4,040/mo."

"If both houses 'values' were cut in half and your existing home was worth $200,000 and the desired home worth $400.000 - $100,000 down and a $300,000 loan which is $1,984/mo plus $367 in property taxes for a total payment per month of $2,351/mo. Same house. Same standard of living. Heck of a lot less money."

"Sometimes you have to run the numbers but as long as the person didn’t buy recently and/or didn’t HELOC the property and they want to stay in San Diego, they are better off with lower prices if they ever want to move. Even moving from like to like would mean much higher property taxes."

"People freak out when their 'net worth' drops, but so often this is a false number. Sometimes just running this scenario for them helps out immensely. Unfortunately, if they are retiring and moving out of state then this is a bad scenario for them. (Although it can be argued that prices are dropping everywhere.)"

To which was posted, "Exactly! It was property taxes that kept us from buying up, and convinced us to sell-to-rent. Our payments would have more than doubled, just to get an extra bedroom in a **slightly** better area."

One wrote this, "From my POV: I built my house in 98-00 and never calculated what it cost, nor what I’ve added since then. As the local 'comps' are somewhere between abandoned travel trailer and new-ish doublewide mobilehome, the construction guys kept telling me that I’d 'never get out what you’re putting into it.' I’d reply that I had no intention of ever getting 'anything out of it' because I had no intention of ever selling it. This was my home."

"They thought I was nuts, but I paid them in cash every Friday, so they eventually cut me some slack and quit harping on me."

"And sure enough, when I moved in, the county assessed it at about 10% of what a comparable place in any other part of California would fetch. Boy, was I pissed at myself for wasting all that money on thoughtful design and high quality material and workmanship!"

"So no. The equity fluctuations have had not one iota of effect on my outlook or my finances. I could never replicate this place for anywhere near what I might be able to afford even IF I could find the skilled labor and a comparable piece of property to do so, so I’ll probably die here. A happy camper who still has no clue as to what her home is 'worth.'"

"(The problem is the FB’s from elsewhere who think they can move up here on a budget cut…and end up trashing their land because they can’t afford to maintain it. On the other hand, as their property values tank, it’s just that much easier for me to buy them up, doze their POS trailers, and let the land revert back to nature.)"

One had this. "Ecclesiastes 1:9 says.. '..there is nothing new under the sun.' But i prefer to quote Don Ameche.. 'Things Change,' and a fall in price could become important."

Another cites market forces, "Here is the beauty of a free market: Sellers are entitled to fantasize forever about the ever-increasing value of their faux chateau. Under a free market system, they cannot be coerced into selling for one penny less than they know their home is worth."

"Would-be buyers can sit on the sidelines forever if they believe homes are overvalued. They may rent indefinitely if they don’t think homeownership is a smart financial move."

"The stalemate can continue forever, and nobody is the worse for it!"