Rick and Becky,
Congratulations on the additions to your family.
Your next step is to head to IKEA and see the models they have for maximizing usable space in a home.
After getting everything assembled, then pick up the phone and call a New York REALTOR to determine what you situation really is. IN some communities, prices are at the 2008 average sold price points. It is possible that REAL MARKET DATA (not on line guesstimates) will reveal an entirely different reality.
Based on this reality, your REALTOR can advise if continued enjoyment of your new IKEA furnishing is your only option or if you actually have equity or can break even, and what is available for you to buy in the existing real estate market and what purchase assistance programs are available for folks just like you because, we do this dozens of times every year and actually do know what we are doing.
There are many options. However if any are beneficial for you is directly related to your situation, needs and resources.
If you are serious, you will need to pick up the phone and call.
If not so serious, click on those 'contact' links.