I’m a newer member here and think this might be a good place to tell a short version of my story. (yes, below is a short version)
We just sold our house bought in 2002. Let’s just say that we bought because it was the only house in our favorite neighborhood that was for sale and in our price range at the time. A few years later, we decided it just was not the right house to spend the rest of our lives in. Rather than invest more into it, we decided to put it up for sale and leave that for the next owner.

Our sale price was about 7-8% ($50,000) less than I know we could have gotten at the peak. But one nearby sold at $50,000 less than list price a few weeks before we got our offer. So I do think the price we got was fair for today, but it does hurt to have “lost” $50,000.

We were willing to immediately buy a new house costing somewhat more than our sale price. But it seems that no one else realizes that they need to mark their house down around 10% from peak prices. (we want to stay in the same central San Diego area, so we don’t have the same number of quality for sale choices as, say, someone in Otay Ranch or San Elijo.)

So we just signed a lease on a house near the one we are selling- rent equal to our old mortgage payment. I figure we will just relax there, and bet on the fall of the market. I do want to buy again soon because I value the stability (have two small kids).

Our still-substantial profits will go into to savings account getting 5+% interest. We already have our eye on a few places we like in our preferred area, but are waiting for them to face reality and lower the price. I am sure our non-contingent, half cash offer will be very attractive to a desperate seller soon.
Of course, now I am debating if I should even bother looking for a “bargain” this year, and should just wait to 2008-2009 when things really crash. I know we are on the downslope, but I’m more and more sure that slope is going to be a long one. Thus the name “betting on fall”