SS,

Looks like you have done the math well. We were in a very similar
position and decided to go in for a low 200s townhome this year, as a
starter home. The monthly payment does not increase THAT much vis-s-vis
rent, and you have the satisfaction of owning your place. Mortgage
rates are low now, who knows about 2008? Besides, condo/townhome need
not necessarily come with hassle/baggage/rework. Check property sales
and appreciation is your area, make sure you buy in a desirable
location if you intend to sell it off in a few years' time. The best
way is to get into the market as a prospective home buyer, the choices
will become that much clearer to you and you will be able to make an
informed decision yourself.

Good Luck!