Selling in a "Seller's Market" 

The first thing is pretty simple. Find out how much equity you have .

Right now most people have significant equity in their homes. Even people who bought in the height of the bubble now can sell their home for more than they owe on it. 

Does buying once you sell make financial sense? 

Okay, you know you'll make money from the sale of your house but now you have to buy again. We just said prices are up so why would it make sense buy in a seller's market? Let's say values are increasing by 5% per year, you owe $150,000 on your house, and it's worth $200,000. You are earning $10,000 in equity every year if you stay where you're at. However, If you can use the equity in your current house + your income to move-up into a more valuable $400,000 property that 5% yearly growth in home value is earning you $20,000/ year in equity. Not only are you moving into a more preferable nicer home over time it can prove to be a great investment. 

In conclusion, it makes the most financial sense to sell in a seller's market if you have significant equity and you are moving up into more valuable property.