If you have equity in the house to support the short fall related to your mortgage balance to fair market value, or you can support the short fall with cash and you want to relocate as soon as possible---sure, why not? Home values are not going to increase much within the next several years. You will probably find a home when you relocate that is an exceptional value where that home's value has decreased as well. I'm seeing many home owners purchase larger and better homes now that they could not have otherwise afforded 36+ months ago. Most sellers are taking a hit when selling their home, however, they are getting far more in return with the purchase of their next home. Good luck!
The real question is: How motivated are you to relocate.
If you think you will wait until your home value increases, think twice. You will most likely purchase a home in your new location. Currently home values are suppressed in most market, so you will buy a home at a good price. Right now you have the lowest interest rate that you can get and your new home will appreciate over time once the market recovers, similar as you current home will.
If you really want to relocate, go for it.
Licensed Associate Broker
Accredited Buyer Representative
GREEN Designated Agent
William Raveis Legends Realty Group
Appraisers are not the end all authority on the value of you home. Mathematical reasoning can get you closer to the truth. Ask your favorite realtor to analyze the market. If you do not have one, ley me know. I will find you one FOC
Also, are you selling because you need to relocate? If you don't need to sell, you could take advantage of low rates and refinance if your current monthly mortgage is too high.
I am selling a home now, but only because I need to. I'd much rather wait at least 6 months or maybe longer. Low rates mean more potential buyers, but with the economy so weak, buyers are hesitant.