Rent vs Buy in San Francisco

Rent or Buy signs for the housing market

In 2012 the cost of living in San Francisco had an index of 163.4, the fourth highest score in the US.   The national average is 100 and includes everything from groceries, transportation and housing.  In San Francisco the monthly rent averaged $2,630, average home price $810,067 and to fill up your gas tank $3.84/gallon.  So is it better to rent and pay $2,630/month or buy and have that be your mortgage?  According to Zillow, in 64% of metro areas, buying is more advantageous than renting if you plan to stay in your home for longer than 3 years.  For San Francisco the break-even point was 3.4 years.  The breakeven numbers are primarily influenced by home appreciation rates and to large extent by home values, rental prices and rent appreciation rates.

“Locally high home value appreciation in many areas, combined with historically low mortgage rates and low home prices relative to recent peaks, has made buying a home a more advantageous financial decision than renting for many would-be buyers,” said Dr. Stan Humphries, Zillow’s chief economist.

Living in such an expensive city, I do my best to manage my money wisely.  Ten years ago I was paying $1500/month in rent for a studio.  My mother who is a real estate broker insisted that I put that money towards a mortgage.  If I had stayed, I would have ended up paying $180,000 in rent over the 10 years.  Instead I was able to put that money towards the equity in my condo.  I was also able to collect more money at the end of the year from the tax benefits of owning a home.

More than the financial benefits, owning a home in San Francisco has given me a great sense of pride.  It is something that I have enjoyed fixing up over the years and making it my own.  It gives me a common bond with the other homeowners in the building and has led to several great friendships.  Living here makes me feel grounded and no matter the chaos going on in life,  I always have the comfort of my home.  This is by far the best financial investment I have made personally and financially and I highly encourage more people to experience the rewards of owning a home in SF!

If you are curious how much you can afford to buy, click on the mortgage calculator or let me know if you would like to speak with a lender.  You can also get a step by step guide at It will walk you through the entire process from beginning to end.  I look forward to helping others share this wonderful experience.  Please connect with me on Facebook to follow more market trends in San Francisco.


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