...
If you wouldn't buy it as-is, you should sell it.
^^^ Exactly this. It applies to investments as well. (which a house is not)
I disagree with this as a general rule (especially for buying/selling homes).
I would posit that this is only in the case that you have equity. OP may have a little bit, but will probably pay a little out of pocket at closing due to commissions and such.
However it's not that straightforward with an underwater property. If you have to bring, say, 100k to closing then it's not as straightforward as you two imply.
In the case of selling something for a positive amount of cash, then yes, not selling is the same as buying, and you can ask yourself if you'd buy at that level.
An underwater car is the same issue - I don't think someone who owes 15k on a car worth 7k should only consider if they'd buy at 7k today, and if they wouldn't, use that as a reason to come out of pocket 8k..