Ball'n Rental Places in the cities.

[Goat Blower]

This is what you might do in a good market, but not a bad one like now. Say you sell your townhome and don't get that much since the market is low. You rent and after a year the market is up again and guess what? You pay more for your next house. You just lost $50K+.

I'd look at affordable houses in a good area, but the areas you listed unfortunately that's not really feasible. I'd pick a less popular city like Brooklyn Park or Fridley, you're real close to downtown and you don't pay $300K for a dump. And I'd look at houses but have a contingency that your current townhome sells before you purchase the new place. A lot of sellers don't like this, but the market sucks, prices are good, and a lot of sellers will do whatever it takes. It's a real good time to buy right now.