The trustees of a living trust have a tough job after a death. They have a duty to the beneficiaries of that trust to invest and manage the trust's assets prudently and to distribute them as directed by the trust document.
But what do you do if the trust's main asset is the deceased's house? What do you do if you have to sell the house and nobody's buying? And what if the market just keeps getting worse as time goes on?
There's no easy answer here. As a trustee, you have a duty to get the best price that you can, but it's not your fault if the bottom's fallen out of the market. The longer you wait, the less you might get, so sitting on the house isn't a realistic solution. The beneficiaries are eager to get their inheritance and they don't want you to wait either. So, sell you must. But be smart about it. Expect trouble from disappointed heirs; make them your allies (if you can) to head off any rumblings that somehow they could have done better.
What you need to do is to communicate with the beneficiaries and keep them in the loop in terms of what you're doing to get the best price. Formally notifying them of any offers you intend to accept, or the price you're asking on the market, is one way to protect yourself -- such formal notification gives the beneficiaries a limited period of time to object to what you're planning to do. Find out if your state provides this -- it's often called a "Notice of Proposed Action."
And of course, keep really good records of what you're doing. If the beneficiaries ask for these, provide them (if they sue you, you'll have to produce these records anyway, after all).
To learn exactly how to proceed as a trustee, keeping in mind the legal, personal and practical aspects of administering a living trust, see The Trustee's Legal Companion, by Liza Hanks and Carol Elias Zolla (Nolo).