$235,000, sell at $200,000, paper loss of $35,000.
If the $200,000 condo appreciates at 12% a year for the next 5 years it will be worth $352,000.
If you instead take the $35,000 loss in order to purchase a $300,000 house and that house also appreciates at 12% a year for the next 5 years it will be worth $529,000. So taking the $35000 loss now, will allow you to make another $141,000 in 5 years.
The numbers work best if: the new house is much more expensive than the existing property, and you plan to be in the new house for several years. Also, I expect appreciation to be much more moderate in the next few years - using 8% would probably be more realistic, but it will depend on your particular neighborhood as well.
You as so close to break-even, and maybe even a profit; selling now could cost you more than if you waited a while.
Most good areas have seen 12% + increases.
Consider also what RENT would be for a place, as opposed to what you're paying for the mortgage.
Good luck and may God bless