Assuming you purchased your house with 20% down and 80% mortgage (which is very common), housing only has to go down 20% for you to "go to zero."

Further, unlike stocks, buying/selling houses incurs fees (round-trip fees can be anywhere from 5% to 12% depending on your city/state/country), so really, a house going down 15% is like you going to zero.

Going to zero has zero to do with real estate being a secure investment. Owning an underwater property and running into a situation where the investor can't continue to make the mortgage payments is just as bad as the asset going to zero for most.

> you can invest on loaned principal without extreme risk in case of failure

Yes, when this happens thousands upon thousands of times you have the 2008 world wide financial crisis.