Wow, Anthony--there's no quick answer. Great homes in great areas in great condition will lose less value than distressed properties. At nearly $80,000 less than the last sale (and selling for less than what is currently owed on it), you already know that it is a "good" deal. Add to that the fact that you really like it , and, I'm assuming, want to live there for the next 3-5 years, so the only real question is are you over paying?
Here's a few things to keep in mind.
1) Your agent will be able to provide you with the recent comps in the development, as well as the current market situation. In many cases, we're seeing short sale and bank-owned properties in this price range selling in a matter of days with multiple offers. Remember, these are not normal sellers. These types of properties are already at the bottom of the market. That said, the bank may have approved a price that was submitted months ago--and is no longer accurate. Only your agent can tell you for sure.
2) Many buyers will hold to their guns about paying $5000 less than the asking price--but will then lose thousands more when interest rates go up a quarter of a percent. That's penny wise and pound foolish. In many instances, it's better to pay more and get a lower interest rate. With rates on the rise, in many cases you do better locking in a higher sale price and lower interest rate right now.
3) Although you can write an offer for lower than the bank-approved amount, the bank does not have to accept it, and may takes weeks or months to respond to your offer--if they do at all.
Short sales are a complicated animal--be sure to work with an agent who has experience in bank negotiations--even then they can be a bear.