Renting versus buying in the greater Bay Area
The past year has been an interesting one for the United States housing market. As the economy continues to recover, many experts expect real estate listings to increase along with available jobs and other quality of life statistics.
For example, according to Bloomberg, the S&P/Case-Shiller index of property values in 20 metro areas shot up by 1.2 percent from July 2011 to July 2012, the largest yearly jump seen since August 2010.
"All in all, we are more optimistic about housing," said David Blitzer, chairman of the S&P index committee, according to the news source. "Stronger housing numbers are a positive factor for other measures including consumer confidence."
However, some people continue to think that it might be more cost-effective to rent rather than buy. While this thought might be accurate for some metro areas, it is certainly not true for San Francisco - homes for sale in the Bay Area are much more valuable in the long-term if purchased outright.
The Los Angeles Times reported that in response to growing demand for housing, the San Francisco Board of Supervisors are considering changing the city's building code to allow for 220 square-foot "micro apartments." These units are expected to charge a monthly rental fee between $1,200 and $1,700. Would you pay this exorbitant amount of money for an apartment no bigger than an average-sized bedroom?
If you have a family and are considering relocating to the Bay Area, consider the average monthly cost of a single-family home in certain communities. The San Francisco Chronicle reports that the average monthly rent in San Francisco is currently around $3,517. That's an increase of $987 from the average rent in September 2011, which equates to a yearly difference of $11,844.
Think you can beat the rent by living in a different community? Think again - the news source reports in Bernal Heights, $3,520 can pay for a one-bedroom sublet. In the Pine Lake Park neighborhood, $3,500 gets you a single-family home with only two bedrooms and a third "in-law" unit.
Rather than rent a micro-apartment or a small home in an outlying community, one should consider buying one of the many affordable houses for sale in the Bay Area. While the down payment might be quite hefty in the short-term, the long-term value of the property is something that cannot be disputed.