I love the irony of selling high and buying low. When buying an investment this is the only logical way to approach it. When one buys a home (primary residence), how can you time the inevitable changes that will be occuring in ones life (i.e. marriage, divorce, new child, empty nester, another child, housing an elderly parent, etc)  Answer. You can't? Therefore, timing is sometimes thrown out the window when 'life' occurs.

The best way to judge expectations when it's time to buy or sell is the markets absorption rate. In a nutshell, absorption rate gives you an idea of how long it will take to sell your house (seller) or how much negotiating you may be inclined to do when buying (buyer).

< 5 months absorption = sellers market
5-7 months of absorption = nuetral market
> 7 months absorption = buyers market

See example below….

INVENTORY

     The total number of houses for sale within a defined market area

ABSORPTION RATE

     The rate at which homes will sell within a given period of time or unit sales per month

EXAMPLE

     48 sales in 6 months ~ divide the # sales by the # months = 8 sales per month

MONTHS OF INVENTORY

     Time required to sell all existing homes ~ divide inventory by absorption rate (# sales per month)

EXAMPLE

     88 houses in current inventory divided by 8 sales per month = 11 months of inventory