Renting vs. Buying One of the standard ways to evaluate if a home market is valued correctly is to compare what it costs to rent a home versus to buy it. The Economist magazine, one of the earliest to predict the housing bubble, recently stated that based upon current rent vs. buy costs, U.S. homes are now slightly undervalued. In SF, rents have been climbing.
This analysis compares the average asking rent for a 2 bedroom SF apartment ($3350 per Rentbits.com), to the median price for a 2 BR, 2 BA condo in Noe Valley ($850k). (There is a full report that accompanies these charts.) Calculations vary hugely depending on assumptions regarding down payment, mortgage rate, future inflation & appreciation, closing costs and other financial criteria. Perform your own calculations at: