If you’re smarting over your mortgage, you can always console yourself that at least you have it better than everyone who‘s still renting — unless you bought in Cupertino, Los Altos, or Woodside, in which case we’re afraid your tenants are getting the last laugh.
That’s what Trulia’s bi-annual, 100 metro area Rent vs. Buy report says, which singles out the nine exclusive Bay Area communities where the number crunching shows that renting is a better deal than buying, at least for now.
Nationally, it is 34.8 percent cheaper to own the average American home than to rent it. Even with the way things are in San Francisco right now, home buyers enjoy comparable savings of 30.9 percent over renters. As punishing as the real estate market is, the rental market is just that much worse.
The study assumes a 30-year fixed rate mortgage and a 20 percent down payment on a San Francisco home worth $1.1 million, weighed against the city’s average rent of $4,500 a month.
In Oakland, it’s 37.6 percent cheaper to rent; in Berkeley, 15 percent; in San Jose, 24.4 percent.
Where things get interesting is when you look at the handful of Bay Area cities where the math works out in favor of tenancy. Alas, there aren’t many. One or two are places you might not even have heard of before. But anyone with a lease within nine select metro areas can pat themselves on the back for beating the housing crisis, at least for now.
The town of Los Altos Hills (not to be confused with the actual city of Los Altos, right next door) gives the best value: The median rent is over $10,00, but since the median home value is over $4 million. Technically speaking, that's a bargain by a margin of 16.2 percent.
Saratoga comes in second with $6,100 rents over $2.3 million home values, a savings of 12.1 percent. Third is Monte Sereno (population 3,300), where you get a savings of 11.9 percent by renting for $7,000 a month rather than buying a home for $2.7 million.
Hey, we said they were deals, we never said they were cheap.
In Cupertino, the margin is 9.5 percent in favor of renting; Los Altos (city), 6.4 percent; Emerald Lake Hills (unincorporated San Mateo County), 4.5 percent; Woodside, 3.5 percent; Stanford, 3.3 percent; and finally, Los Gatos, 2.7 percent.
And if you can’t afford to be renting or buying any of those places, the same report has it that Bethel Island (Contra Costa County, population 2,137) is the cheapest place to live in the Bay Area, with places going for an average of $1,950, and an average home value of $289,500. We’re told they have a very nice golf course.