Writedown - is what's good enough for Citi good for us?

So, should we take a write down on the value of our house? I'm talking about the value we ascribe to our house as we keep track of our net worth. This is a totally esoteric debate since we're not planning on selling anytime soon. We may, however refinance the house in a couple of years, so maybe it would benefit us to take a very conservative view, if for nothing else, it would keep us pleasantly surprised when the refi happens.

Does it matter? We haven't jacked up the estimated value of our house since we bought 3 years ago, only going up about 7% over the purchase price a year ago, and have not touched the estimate since. Housing prices have gone down some around here, but not a ton, and it is not the case that there are tons of house sitting on the market - a few, yes, but not strings of for sale signs along any blocks so far.

A more reality based thought is that if we look to our "net worth" estimate as a barometer for how much debt we think we can take on, then we should probably take a write down. If we resist debt at all costs, then it probably does not matter whether we take a write down on our books. Probably what we should do is make a calculation on our spreadsheet that eliminates the consideration of both our mortgage debt and our home value estimate. That way we can see whether and how we're progressing against our other outstanding debt, which is almost all student loan debt.

That sounds like a plan...