The rental market is quite strong in our area, and rental rates are up. If you are staying in the area, you can probably do a fine job of handling the rental yourself, but I highly recommend using Tenant Screening. Also be sure to get suffcient deposits (most often first month, last month and a security deposit) and most management professionals recommend that you do not allow smoking or pets, as they can cause significant damage to the home.
If you are leaving the area, I think it would be wise to hire a professional property manager. Quality and experience vary, so get recommendations, and if you wish, you can contact me for a reference.
If you are staying in the area, and not excited about becoming a landlord, I would not hesitate to sell your home. If it is priced and presented well, it should sell. You will save a little money on the reduced selling costs, and you will be in a position to make a very good buy on your purchase, between the lower prices, the great interest rates, and the expanded inventory from which to choose your new home.
So many people think this is a bad time to sell and buy, but I think it is a GREAT time to do so. The homes in the more modest price ranges are moving faster than higher end homes, and many sellers are now willing to look at contingent offers, which was almost unheard of a couple years ago. A contingent offer can be win-win for a seller, since they have their "eggs" in two baskets, rather than one. If they find another buyer for their home, they are in good shape, or if the contingent buyer finds a buyer first, they win too. A contingency on a listing is not negetive either, as long as it is short, because it sends the message to other buyers that the home is desireable.
As a contingent buyer, the situation is also win-win because it does not involve any monetary risk. You can take your time and shop, put in an offer, and if accepted, work on getting your home sold. If your home does not sell before the seller finds another buyer, you will get your earnest money back, no loss, no foul. The difficulty can lie in the emotional cost if you become too attached to that new home and can't get your home sold before another buyer shows up. You would probably have the fall-back position of renting your home then, and going forward if your home does not sell quickly enough, but the odds are that your current home should sell first, if it is priced right and in a lower price range than your new purchase.
As always, I recommend that you sit down with a very experienced agent who will help you thresh out your options without pressuring you to make a decision that might be more in their best interests than yours.