Alvarez all day long. Best bang for the buck by far, and right in your price range. My only acoustic guitar is a dreadnaught (lol) style Alvarez I picked up for like 175, and I haven't felt the need to upgrade for going on 3 years now. It plays great and sounds pretty good, so I'll bet for 500 you can get something really nice.
Have you seen these?
Originally Posted by spliff(TONE)
Kinda hard to find and most online retailers never have them, but they are sexy as hell and sound HUGE.
I always felt when there is limit to spending, looking at the used market may be the better direction. Scope the sites and wait for the steal.
If I had the dough I'd splurge on a Martin but I just throw around cheap acoustics. I got a little Harmony from the 60's and it's been nice, will never get rid of it