I am in the beginning stages of planning R's 2nd birthday party but I am having a hard time deciding whether or not to keep it to only family. Regardless of the guest list, we will have it at our house and my concern is if we keep it family only my neighbors (3 families with 2-3 kids each) will see the party going on and feel slighted as we have been invited to/gone all of their kids' parties.

My major issues are as follows:
-If I invite the neighbors I am also opening it up to all of our local friends which makes the guest list go from roughly 20 to possibly closer to 40 (counting both adults and kids).
-Our neighbors have older kids that need "entertainment" that goes beyond our playroom...each time they've had a party, they've rented a bounce house or something similar. We really don't want to have to deal and/or pay for that.
-Even if they don't see us having a party, I am friends with them on social media so they will know we did indeed throw her a birthday party.

Thoughts? Ideas? WWYD?