Don't stretch yourself.
The thinking that house should not lose value is a laughable one now. Selling with a loss is not such a bad thing. Forget about the loss, compare your options between selling and not selling. That's what you need to do.
Another way to look at this is that your goal is to be able to live in a community with better schools. Had your house not dropped from $31 to $25, what do you think would be the price of a $450k house in the community you desire? More than $450k I suppose? So other than making you feel worse, does it really make a negative difference on your goal that the housing market dropped?
Need to look at your overall financial and life goals, not just one asset in the whole portfolio.