Consider this; you have a home that is currently worth $400,000 and you want to move up to a home that is worth $600,000. You would need $200,000 of extra funds to make this move.
Now, the market begins to move to a buyers market and prices slide 5%, let's re-evaluate our scenario above.
Our $400,000 home now sells for only $380,000 (5% less) and the $600,000 home now sells for $570,000. We now need $190,000 dollars, a full $10,000 less than before! The smaller loss at sale will be compensated by the larger savings at purchase, resulting in a significant net gain.
Remember, when moving up in a declining market, look at the big picture as to how much money you KEEP vs moving up in a stable or appreciating market. Falling prices are a great opportunity for a savvy homeowner to move up.