Salfizo mentioned West Loop, South Loop and Hyde Park and asked about the market in these specific areas. My response was based on that. She could certainly go an outerlying suburb and find something much cheaper.
In order to stay at around $1500 monthy payments for a condo (taking into account **average** taxes and assessments for a Chicago condo - these will obviously vary), your loan amount max would have to stay at around $150,000 (also taking into account the slightly higher interest rate you would have to pay since you have no or very little money down, and possible PMI).
It IS possible to get a condo for $150,000 in the city, but you'd have to head far south or far north, or into newly developing areas of the city. A 2 bedroom/2 bath with parking included in this price range would be nearly impossible in the city.
The truth of the matter is, on a month-to-month basis, it is cheaper to rent than own in terms of the amount of space you can get for rent v. buy. However, when you take into account the tax breaks you get as a homeowner and the eventually equity you will build as a homeowner, the overall 'big picture' may show you that owning is cheaper in the long run.
Go drive the neighbourhoods around Hyde Park..in the smaller, (10 to 20 units) there are all kinds of good values and incentives.