The root of the answer is how much you value certainty. You can fix your loss or are you willing to leave things open (certainty vs uncertainty). The certain path is you sell now, quantify and take your loss, put it behind you and move on. But since you are happy living there – I would pick the flexible but uncertain path because realistically many things can/will happen in the next 3 to 5 years that are impossible to predict that have NOTHING to do with the housing market. Maybe you will find that as your family grows you DON’T desire a bigger house or you could always rent the North Park home and rent a bigger home for your family. You seem smart, flexible and not a whiner so I would roll the dice and feel confident that there is a good chance that if you continue to make the best decision based on current information into the future that you will hopefully minimize any loss – and maybe in the long run even come out OK on the house purchase. I also live in North Park – just enjoy the neighborhood, your family, work hard, make the best investment decisions in the present (i.e. 401K or any excess funds you have) and don’t sweat the house purchase. You like the home so enjoy it.