It depends on why you want to sell. Also, are you planning on buying something else.
Do you have move, if you do, then sell, even if you may have to com up with cash at closing.
You could also rent it if the rents are high enough. Have a realtor check comos to sell and or to rent.
It really depends on why you want to sell ,,,,, Judy Berg realtor Phoenix, AZ

As Cindy suggests, first you need a CMA to determine what it really is worth. (If it's the condo on Royal Ridge, a quick glance at what's on the market, what's sold, and what's been withdrawn, a ballpark guess at what it would sell for would be around $170,000. That's just a guess, absolutely not a CMA.) There are a lot of short sales in your complex priced around $179,000, and they aren't selling. In fact, there's a withdrawn short sale at $150,000. However, you bought for well under that.

Only consider a short sale if you're facing severe financial problems. I'm concerned by the growing number of people recommending them when sellers simply want to sell. Danilo's comments are, as usual, right on target. Try a short sale only if that's your only option.

So, know what the property is worth via a CMA. Then, as Danilo recommends, have a Realtor do a net sheet for you. Figure out where you really stand. Then, if you really are "upside down" and can't afford to bring money to closing, consider the other suggestions listed. Or just sit tight. It'll take a few years (I guess) for properties like yours to recover some of their value. But you've got a place to live and you're slowly paying down the principle.

Hope that helps.

I am not an attorney and I am not giving legal advice, just my own opinion… there got that clear.

Most areas around the country seem to be having a rough time with real estate. Here in the Denver metro area, we’ve been in the top ten states with highest foreclosures for the past five years. That on top of builders liquidating their over-stock has really hurt our market. I frequently get calls from people asking the exact same thing; using almost the exact sale words. If you “owe almost exactly what it is worth” you are still going to have to pay closing costs such as taxes, commissions and other fees at closing, so my advice simple. Even if you owe a lot more then what it is worth, the advice is the same.

A. Keep making the payments and stay until you have 1) paid down the loan enough to sell or 2) the market comes back to a level that you can sell. Real estate markets always come back; it might be next year or it might take 20 years.
B. Sell the traditional way and bring money to the closing to cover the deficiency.
C. Work out an arrangement with the bank for lower payments or a longer loan, etc.
D. Sell using what’s called a short sale.

You probably wouldn’t be asking the question if options A, B or C were likely to work, so let me explain more about option D. A short sale is when the bank agrees to discount the amount of the loan pay-off by the amount of the deficiency. This is happening more and more with the way the real estate market is going these days. You wouldn’t be required to bring money to the closing and you wouldn’t be getting a dime at the closing.

Why would the bank do that? It’s not because they want to help you. It’s because they want to help themselves. Foreclosing on a property takes a lot of money and a lot of time and then what do they have to show for it? Another property that they need to sell, only now it is probably very run down and will sell for less then it would sell for now, if you were to sell it now. We’ve all seen the bank owned properties around with the grass growing up and the gutters falling down. Plus the bank still has to pay for insurance (vandal love vacant homes) until they sell it, while not getting any mortgage payments and then they have to pay all the closing costs and commission eventually anyways. If you add up all the payments that you’ve made to the bank over the whole time that you’ve had the loan you will realize that the bank isn’t losing as much money as they would like you to think. So it makes sense to cut their losses quickly and loan that money back out again. You should make sure that if the bank agrees to this that they also agree to accept it as a full pay-off of the loan. That means that on your credit report it will show as a zero balance.

What will the bank do with the deficiency? As I tell my clients, the bank can do one of three things.
A. The bank can lose your file and you never hear from them again. This happens more often then you might think with all the banks merging, being bought out or going bankrupt.
B. The bank can “write-off” the amount lost as a bad debt; in which case they would also send you and the IRS a 1099-misc income statement which is a fancy was of saying that they “gave” you the difference as a “gift”. The IRS would then expect you to pay taxes on that “gift” so if your deficiency is a big number, it could make a difference on your taxes even pushing you into another tax bracket. To avoid this problem, congress recently passed a new law (H.R. 3648 – Public Law 110-142). There are some limitations and conditions, so look it up on the web and talk to a legal expert to make sure you qualify.
C. The bank could take you to court and get a judgment against you for the difference. This is rare. I’ve only had it happen to one client at this time. If it’s happened to you, I’d like to hear about the situation. Why would the bank go after someone hoping to collect money if the bank already knew that someone was nearly broke? The only reason I can think of is that they thought my client had lied. My client had a $100,000 deficiency, but instead of fighting it in court where the only ones to win are the attorneys, my client settled for $30,000 paid over 5 years with no interest.

In any of these advents I recommend talking to a CPA and/or an attorney to make sure you know what your options are and what the results might be. I also recommend that you find a good Realtor who has done several short sales and knows how to talk to the banks.

Dan has given you some great advice. The first step is to have a solid CMA done on your property and make sure that your thought that "you owe exactly what it is worth" is correct. Run all the numbers and a few different scenarios to see which one works best for you. Depending on the location of your property and the price point it could be one that attracts a buyer looking to take advantage of today's low interest rates.

Have a Realtor do a "net sheet" for you based on market value, what you owe, commissions and closing costs. If you owe more than what your net proceeds from the sale are, then you have 5 choices:

1) Don't move and wait until the market value comes back up (3 to 5 years probably, maybe more)

2) Bring money to the table to make up the difference (however you come up with that is up to you)

3) Use a "Limited Services Agency" broker/agent that will only charge you about $500 to put your property in the MLS, but you still have to pay a Buyer's Broker/Agent something (anywhere from 2 to 3 percent, I recommend 3 percent)

4) Try to sell it on your own (For Sale By Owner) to avoid all commissions. But you won't have exposure to any Realtor and it's much harder to sell you property that way.

5) Try and negotiate a "short-sale" with your bank. But they will audit you and it's similar to an IRS audit (not pleasant). You will have to prove extreme financial hardship and the chance of approval is slim to begin with. It's almost none if you just don't feel like living there, but can afford the payments.