Your situation will be the problem for many sellers in today;s down market. You want to take advantage of the Low Interest Rates, Low Prices, but unfortunately you are also stuck with selling at the Low Prices. What are your options?
1. If your condo allows for rentals you could rent your unit out, the downfall, NONE, of the income you receive from your rent will be considered when you purchase a new property. Unless you have 2 years rental/property management history which is why the one lady suggested you rent your unit for 2 years and you rent somewhere for 2 years..
2. Do you have 20% downpayment for a new property or do you just have 5% saved? If you have 20% down, you could sacrifice your down payment money's when you sell your condo, and then get into an FHA mortgage where you penalize yourself because you don't have the 20% down so you are forced to pay high Mortgage Insurance, thus defeating the benefit of low interest rates.
3. If you have 20% down for a new property, could you refinance your condo at todays low interest rates you pay minimal fees with a good company for refinancing, if needed pay some moneys further down on your condo or more points to get into a really really low interest rate with the goal of reducing your monthly expense by more than $300/month, then rent out your unit for 3-6 months, save up money in the process, live at a friend or relatives home during that time, then, go back to the drawing board of purchasing your "Second home" which will become your primary residence. The key here is your current income will have to cover both mortgages, even though you are receiving income from the condo. If your income can do that, and you have 15-20% saved for down payment you are in a great position to own two properties one generating income the other used as a roof for yourself.
Unfortunately if you can't figure out a way to support both properties with your current income your situation is a tough one.
ps. here is an interesting blog i wrote in 2009 about real estate prices which is coming true these days.
If you need a knowledgeable mortgage broker to work with in Chicago, let me know I am from the suburbs or chicago and still keep in touch with a lot of quality people in the industry up there.