How does your wife feel about selling?
If she is OK with it I would sell NOW and below your neighborhood comps so you’ll be sure to get the house off your hands.
Next year prices in your area will be deeply affected by the resetting alt-a and option arm loans that were given out to higher end buyers. Get out while you still can and rent for a while until this thing plays out. Then you can repurchase again in a couple years and probably buy a better house than you have now at a cheaper price.
Nothing is worth the stress that you’re going through now. When you are an old guy looking back on your life, how big your house was will be the least of your concerns, your health and spending time with your family is what matters most.