I recommend getting a professional opinion on the value and rental market before making that final set of decisions.
I mention that because of my own situation.
Before I married her, my wife bought a place in North Park. It is now about 60-70% of the original purchase price.
This is where we live now.
If we were to sell, it would be a short sale.
However, if we rent it out, it will cash flow positive.
Its an easy decision since values are rising right now around here.
It may be that you do not have complete information regarding your current situation.
It may be that you are in a much better position than you realize.