[tc-sacto]

Scenario
House Value $250,000 (assuming neighbors house short sells...Listed at $250,000, most recent short sale closed for $299,000)
Mortgage $460,000
underwater $210,000

Option 1
keep existing home. (no emotional ties, could take it or leave it)
In 7 years the mortgage would be paid down to $371,343. *Assuming 6.5%annualized growth from here the house would be valued at $393,000. So It takes me aproximately 7 years to get back to breakeven.

Option 2
Buy a nicer home, in better area at current depressed prices with 20% down. After closing, walk on first home.

cons: deal with bad creadit for seven years. (I don't really care as I pay cash for everythnig... except for the house of course.

*(6.5% is the average increase in median family homes from 1968-2008. )