Sell Low; Buy Lower
The concept that you can Sell High and Buy Low in a local real estate market is an illusion.
Sure, if you invest nationally (or internationally) then you can apply the concept of Selling High and Buying Low becuase you spend your time identifying, tracking and hunting those markets that are at their peak when others are in a trough. This can be a time consuming and expensive process.
If you're like most folks - a "retai"l buyer or seller - simply looking to upgrade to a larger home, better neighborhood or school district in the neighborhoods of Atlanta then you should know that timing the market to Sell High and Buy Low simply doesn't work. After all, "a rising tide floats all ships". Meaning, if you sell your home at a peak of the market then you the house you go to buy will also be at the peak of the market. And if you're making an upgrade this can be an expensive proposition.
Let me explain. In 2005, at the peak of the market, a seller owned a 3 bedroom 2 bath renovated bungalow in Oakhurst (Decatur) they purchased in 2000 for $200,000. Their kids were coming of school age and, though they'd heard great things about Oakhurst Elementary - they also got a raise and loved the Lake Claire neighborhood where their kids could be enrolled in one the better Intown elementary schools - Mary Lin. They put their home on the market and sold in just 14 days for $350,000. Not bad. $150,000 appreciation in just 5 years. They found a perfect home in Lake Claire for $600,000. Took their $150,000 in equity as a down payment and just like that, had a $450,000 mortgage.
Fast forward 3 years to 2008. Because of the down turn in the real estate market those same two homes have lost nearly 15% since their peak values in 2005. So they're now forced to sell the Oakhurst bungalow for $297,500 ($52,500 less than they would have gotten in 2005). Bummer. They've only got $97,500 for a down payment. That perfect home in Lake Claire...that one has also decreased by 15%. It's now on the market for $510,000 ($90,000 less than they would've paid in 2005 at the market peak). They take their $97,500 in equity as a down payment and just like that, had a $412,500 mortgage.
Look at those numbers again. They sold their home for $52,500 less than in the better market...but they came out on top by $37,500. That's the beauty of the "Sell Low; Buyer Lower" strategy. Whatever you lose as a seller you more than make up for as an upgrade buyer.