Hi Kat.  What a tough choice.  We grappled with the same type of decision this past year as well (Dad, Mom, 5 yr old, 3 yr old, 1 yr old).  The challenge for us was that while the local public school we were originally considering was well regarded for elementary school, the schools it fed in to for middle school and high school got progressively worse to the point where we felt we would definitely not be happy sending our kids to the high school.  We felt that we had to make a decision in the near term to either move to a new area where we were happy with all the schools, enroll our oldest in a private k-5 school, or stick with the status quo and subject one or more of our children to major transitions above and beyond the typical matriculation transitions.  We decided to backstop our decision to find a new house by applying to a number of private schools for our oldest and ultimately found a new house just in time to sign the 5 yr old up for Kindergarten in our new neighborhood.

Putting myself in your shoes, I'm not sure I'd be able to stick with the status quo, but I'm also really sensitive to the impact transitions can have on the social, emotional, and academic performance of my kids.  Do you have the flexibility to rent a new home in an area you feel you could settle in permanently?  That way, you might be able to minimize the number of transitions, resolve the current situation without having to go the private school route, and give you and your husband enough time to navigate buying a house in choppy market conditions.

If you're looking for help on what neighborhoods might be acceptable to you, education.com has a great resources for information on local schools that helps parents understand how well the schools in their region are doing and what they have to offer.  Check out the website below.  Good luck!!