Your house is only worth what others are willing to pay. If you sell it at what the market price is, you are not giving it away. You can wait for the market to catch up (if it ever does) to the worth of your house in your head but if you do, then the price of what you buy to replace it will have risen accordingly.
We just moved to TV a month ago and had our home on the market for 7 months. We had two failed contracts due to inability to get mortages before we finally sold it. When I put it on the market I priced it at $130,000 less than it sold for two years ago. The current market price of my house had dropped that much. Over the course of the 7 months the market price dropped another $70,000. I followed the market by using Zillow.com to see what they estimated the market price to be and found them to be pretty spot on. When the market kept dropping, so did the selling price of my home. We made a decission to price our home much lower than we originally wanted to and we knew when we hit the magic number when the offers started coming in. At closing I asked what my house had appraised for and was told it was appraised for just $500 above what I sold it for. Did I give it away? No. I sold it for what the market was willing to pay. Even so, I still made a nice 30% profit because I bought it at a very low price just 8 years ago.
In this market you will have a lot of showings but everyone is aware that it is a buyer's market and there are a lot of desperate people out there who HAVE to sell and will lower their prices until they do. Then there are the foreclosures and short sales to compete against. Many buyers are looking for that million dollar home selling for $100K. We found ourselves trying to compete with new, larger and more luxurious homes who kept lowering their prices below ours in a desperate effort to sell. We did what we had to do to sell our home. I still made a nice profit but far from what I thought I would make.
Due to the lower than anticipated price we sold at I have a small mortgage instead of no mortgage but I am at least 7 years away from retirement and living here is well worth it. I would rather live here and work than to live back in NJ and work. We are now enjoying TV with a 70% reduction in our housing cost which is making up some of the difference between my idea of my home's worth and what I actually sold it for.
We are here having a blast while friends back home are still trying to sell because they want their price which they do not seem to be able to justify with any real world numbers. Who is better off?
We sold our house and found our home!