With its hot economy, a continual influx of new residents and chronic housing shortages, San Francisco recently surpassed New York as the most expensive rental market in the country.
Over the past 12 months, median rents in San Francisco have skyrocketed 20% to a median price of $3700, while New York rents have climbed 10% to around $3300.
But while San Franciscans now pay more for rent than New Yorkers, they’ve still got the edge when it comes to buying an entry-level home, such as a condo.
The above chart shows the media price for condos in San Francisco Just over $1,000,000 vs. New York at twice that amount.
With median condo prices still under $1M and median rents approaching $4,000, the rent vs. buy math in San Francisco is starting to look pretty interesting.
The average renter in San Francisco might be better off buying a condo at the median price than continuing to pay $3,700 in rent. In fact, the balance tipped in favor of buying sometime last year, when the median rent was closer to $3,300.
A bit of a silver lining in an otherwise challenging housing market.
By contrast, with the median price of New York condos now over $2M, the average New York renter paying $3,300 might just want to sit tight. Her rent would have to go up to $6,700 before buying a $2M condo made sense.
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