This is certainly a big decision at any time of the market, and most families will think first and foremost, how safe is my employment and then go to the next step.....
Let me just share with you what I usually tell my clients in similar or different situations when they have to make decisions like that:
I think this may be a good time for first time home buyers because of low interest rates, lower purchase prices, lots to select from and the tax credit....... but their employment needs to be as safe as it is possible these days, they must have a solid down payment and some back up money - I always suggest!
Now for those who need to sell their current home to buy another home, I always say it is the wrong time if you want to downgrade, it is the wrong time if you want to buy a like property just somewhere else etc.
But if you are upgrading, i.e. you are moving to a much bigger home, larger lot, newer home, then this may also be a good time for those clients, simply because if they have to sell their current home for less than they would have expected a few years back because of the current market situation and the economy, they will make up that difference and more when they are buying the next bigger and more expensive home.
If they are getting 10 % less on the sale of a 400 K home = 360 K 40,000 less
When buying an 800 K home for 10 % (and sometimes higher priced homes
even a higher percentage because the seller reduced the price several
times and then you can still negotiate but let's just stay with 10 % to make the point
you would be able to buy that home for at least 720 K which reresents 80,000 $ (or better as I explained before)
But remember, you must consider your commission to the Realtor selling your home and your closing costs on both homes the purchase and the sale....
If you are buying a larger home, you will have not only a higher loan payment, but you will most certainly have higher taxes to pay and it will cost you more to heat and cool the home....
Hope all this will help you think it through, the best thing is to sit down and put all the numbers honestly together, and if you need the help of a local agent, by all means do so and once you see all the numbers including electricity, gas, closing costs etc. in front of you, the two of you together will be able to make a well educated decision. Your Realtor will also be able to explain time on market conditions in your area to you, so that you get a feeling for how long your property may be on the market for sale before it gets an offer/contract....
Good luck to you, I know it is not an easy decision, but the lower prices on a larger property, the low interest rates and the need for more space, must make it very tempting.
Edith YourRealtor4Life! Working always in the very BEST interest of her clients!