Many people sell when prices rise high enough for them to retire, move up, or extinguish their debts.
Many people imagine the property ladder as a progression from a condo near work, to a house in the suburbs, to a mansion by the beach. Many people buy entry-level housing, and when prices rise high enough for them to pocket a 20% down for a larger property, they participate in the move-up market. If their income grew while they lived in their entry-level home, the step up can be quite luxurious. If their income didn’t go up much, they are probably better off refinancing into a lower-cost mortgage and staying where they are.
The housing bubble severely disrupted the housing market. The mania prompted many people to buy into a market frenzy and many others to refinance their homes at peak price levels.