Downsizing is a very prevalent trend in today's' real estate market. And the two graphs below demonstrate this trend. The first shows the months-of-inventory of single family family homes that are over 4000 square feet in size (21 months), while the second graph shows the months-of-housing inventory of homes under 4000 square feet (7 months). History shows us that a balanced market is one where the months-of-inventory number is 6. In other words, at 6 months-of-inventory the forces of supply and demand are at equilibrium; subsequently we do not see either appreciation or depreciation of real estate prices.
To reiterate: There are presently 20+ months-of-inventory of homes like the one that you're looking to sell and only 7 months-of-inventory of homes like the one that you're looking to buy. So by putting off the move, what will in all eventuality happen is that you'll end up selling in a depreciating market while buying in an Appreciating market. This is the case because the market for the smaller homes is almost at equilibrium and will enter its appreciating cycle shortly thereafter; the market for the home that you're looking to sell still has plenty of depreciation left in it!
The take-away is that by making the move now you will have MORE MONEY to take with you towards the new house.
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