seattle-relo– To your specific question of what others have done…

After I bought my 2nd house in 1990 and watched it quickly depreciate 20%, I enjoyed my life and newborn son, took a moment to get my property taxes reduced, and continued to enjoy life pretty much ignoring (but knowing) that my house still wasn’t worth what I paid for it for years.

I was probably underwater for 7 or 8 years and really couldn’t sell it for a “profit” after factoring in expenses for 10. But again, we were okay. We took nice modest vacations, my son was able to go to good schools and I didn’t worry about it (really!). It was hardly my dream house, but nice enough.

I finally did sell it in 2002 and made a good profit on the place (although in retrospect, should have held out longer!)

So, I guess my thought to you is if the place isn’t too bad, you should just enjoy it. You probably figured you’d be there at least 5 years anyway, and after that you can see where you want to go. If you want to move, maybe you can turn it into a rental. Perhaps you won’t be cashflow positive, but it might not be that bad.