If it looks like a duck, sounds like a duck, and CNNMoney quotes Warren Buffett warning of a housing bubble, there's probably a housing bubble. Have you ever heard of the Business Week cover curse? It basically says that by the time mainstream media catches onto an idea, it's already too late to capitalize. I take that theory one step further and apply it here. By the time mainstream media is warning you about something you don't already know, you're already too late to save yourself.

This doesn't bode well for me because I'm currently looking for a house, so using my own wisdom, buying into a housing bubble would be a terrible idea right? Wrong. What would be a terrible idea is if I overpaid for a house just so I could own one and get in on the real estate craze. A house differs from a stock in that it has a value other than what the market dictates. I can't eat a share of stock but I can live inside a house regardless of how much it is worth to someone else.

Who I am fearful for are my friends and colleages who are overpaying just so they can own something. They don't evaluate a home solely on its merits (location, # bedrooms, square feet, age, etc.) but include their potential earnings for when they sell. It's comparable to the tulip bulb craze, the Florida real estate bubble, the tech boom, and countless other periods of irrational exuberance. (by the way, a great book to read about stock market bubbles is Wall Street: A History by Charles Geisst)

Don't fall in that trap. When you are looking at a home, buy it because you want to live there. Don't buy it because you think you'll be able to sell it for more later. It's more than a house, it's a home. And by the way, if the Oracle of Omaha says something - it's usually a good idea to listen. :)

This post was originally published at Blueprint for Financial Prosperity, a PFBlog network contributor. If you'd like to leave a comment, please do so there.mortgage calculator