Although I too belive the housing market is going to crash, I can’t gaurantee it and would not gamble on it. Since you live in your home you should not treat it as an investment. You said the current home you live in was purchased in 2000 and if you haven’t taken out an equity loan against it, your payment and tax should be very favorable. Like you said you may not be able to rent the same place for less then you are paying now. Selling your house and putting the procedes into a CD is not a bad idea. The interest on the CD would help you with some of the rent. Other things you should consider:
1. the hassell of moving (twice)
2. the school district
3. the commute
4. relocating your family and the affect it will have on them.
5. the cost of selling and buying a home.
There are some places in San Diego, but not near Balboa Park that are affordable. There is a new development in Fallbrook right next to the freeway with larger homes for around $500,000.
I am a home owner that purchased in 2001 and wants to move up. My neighbors rent the house next to mine for more then I pay for mortgage, taxes and insurance. I was fortunate to buy back then. I’m not going to sell now and rent because it doesn’t favor my situation. I can save more money for my next home by staying in my current home. I am sitting on the fence waiting for prices to drop and if they don’t I can live with that.