University of Chicago economist Austan Goolsbee provides common sense advice on sellling a house:

So by being hung up about whether your condominium will sell for what you paid for it, you arenít just driving yourself crazy trying to get a buyer. You may be threatening the very performance of the economy and driving up the unemployment rate ó provided that many others behave in a similar way.
What is to be done? Well, if you are holding out for an above-market price to recoup your losses, perhaps you would do well to hear the advice that Professor [Christopher] Mayer gives his own family members.
ìIf you want to sell your house then you list it at the market price and you sell it,î he said. ìIf you donít really want to sell then donít put it on the market. But donít say you want to sell and then set the price so high that you spend the year cleaning up every morning, having people walk through your living room and look in your medicine cabinets and reject you. Thatís just painful ó and expensive.î
His research offers a simple lesson for everyone out there waiting for a high price to push them back into the black: Get real.

The folks over at Political Calculations take Goolsbee’s advice one step further and provide a handy calculator for determining the true value of a house.