Of course in the long run: homes will appreciate if only with inflation but, other then that what do you have, what does a home have that's different then a car?  If it's not built like a castle: it wears down: things get old and deteriorate: galvanized plumbing or aluminum wiring: the roof, the paint even stucco, windows, framing and drywall, it all slowly deteriorates.  The only part of a property that does not deteriorate is the land.  Other than the land a home is just like a car: it will slowly crumble with use and so will its value.

Most home owners will steadily improve and maintain a home: they will replace the roof, repaint the exterior and replace galvanized pipes with copper: put in new appliances along with a new kitchen and so on.  This will help maintain the value of the home: it may or may not increase the value above the inflation rate.  Your home is a depreciating asset unless you do something to prevent it from being used up. 

Your car loses value and we don't complain: so why do so with a home? Because the fallacy put out there that a home is an investment.  As I mentioned earlier, a home in the long run will increase in value even if you don't maintain it because there is limited land and its lack will drive prices up in most cases even if the structure deteriorate, but in a flat market, a possible depreciating market you can't count on inflation.

Is it that bad if you home decreases in value.  Well, yes and no.  If its decreasing in value due to the market then it's because of market forces but if it decreases steadily over time, year after year and you have lived in it should you not expect it to be worth less? 

It hard to think of a home this way but maybe we should: we should think of a home as shelter versus as an investment because you expect an investment to go up - it could go down - but you don't expect a product that's being used to go up in value so why a house? 

That's part of the reason why I believe in separating real estate investing from home ownership.  Because by separating the two you put the investment to produce value in the way of cash flow, hopefully at a rate that will give you a return higher then the loss of the deteriorating asset and buy an owner occupied home to live where you want how you want without having to calculate in investment returns on a place you call home. 

So what if it goes down in value: it has been used and lived in: it should go down in value, but it won't, just don't count on it to, this will make buying and selling and investing easier just like buying a car.