Was my home purchase in 2006 frugal?

 I just read this article detailing how home prices in the Northeast
dropped 4.8% from 2006-2007. I purchased my home in Aug 2006 and knew
prices were going to drop but our situation left me very little choice
so I justified my purchase at the time thinking the worst case
scenario is that my house value will drop around 5% a year, well it
did, but I still figure that I'm ahead of the game considering 5% of
my purchase price is still less than I would have paid in rent for
2007. That money would have been thrown away never to be seen again
anyway. Now I know I am still on the hook for taxes and upkeep of the
house but my quality of life is drastically different than living in
an apartment so I consider that expense a wash. Am I wrong in
justifying my purchase this way? Can anyone point out if my thinking
is off on this?

  I forgot to post the link to the article

http://biz.yahoo.com/cnnm/080214/021408_home_prices_fall_for_year.html

 

The main area you are off on is the upkeep of the house. You
pay that when you are paying rent. And you pay the landlord's
taxes too unless the property is being rented out at a loss by
the landlord. That last can happen, but it isnt very common.

So the basics in your logic are correct.

 

If you bought it to live in, don't worry about it.  Prices will rebound over
time and you are building equity.  If you don't plan to sell in the next 5
years you'll be fine.  I live in the Northeast too and while prices have
dropped the demand for housing overall hasn't. It's just shifted because
marginal buyers are no longer able to find loans that they really can't pay
on houses that were overvalued to begin with.

 

Yeah, what he said.  If you were a highly paid investment manager,
supervising other people's money, and you lost in a stock market dip,
then maybe it would be worth beating yourself up a bit.  

In a case like this, you lost a teeny bit of paper equity but still
have the use of the property.  Bottom line is, unless you sell, you
haven't lost anything.  If you have ever invested in a stock, or
personally invested in a business, you realize that valuation has some
fluctuation and just wait it out or assess whether the trend will
continue enough to be concerned..