It is smart to buy in a down market if you are looking to upgrade. The old saying "the bigger they are, the harder they fall" is appropriate in the real estate market. While you may not be able to command as much as you wanted for your home, chances are the house that was 150K more than yours is now only 100K more. So even if you were to say accept 25K less than you wanted, you still would be ahead by 25K by upgrading in a down market. Of course, now it all depends on how financially sound you are, how good your credit is, and what kind of equity you have in your current home. If you are looking at foreclosures, make sure you are working with an experienced buyer agent because foreclosures and short sales can get very hairy.