This is more a question about how you would feel if your PIL/parents moved in next door. This situation occurred to friends of ours a few years ago after the house next door to them went on the market. They became aware that the wifes parents had also put their house on the market but didn't put two and two together until the new "neighbours" actually moved in.
Sounds weird to me but fortunately our friends are pretty laid back and coped (up to a point), they moved a few miles away about 4 years later.
Could you cope or would you be getting the estate agents in pronto?