My area's similar to the OP in terms of housing costs, but has perfectly reasonable rents ($800-1200 for a 1br). There's no way I'd buy around here--and OP, take a look around at what they GET for the $500K. Around here, it's a ticky-tacky semi-detached with a couple of tiny windows and no sunlight on the postage-stamp lawn--but a two-car garage, because they know what matters!
Even low-range apartments around here have big, lovely windows, and midrange+ has balconies. Give me those any day, especially with the cost differential.