I think you should take a look at what rentals are going to cost you before making a decision because rents are very high right now and it may not be cost effective for you to do that.
That said, the market is going crazy right now - seeing multiple over ask offers on good properties in good neighborhoods. I would look at what you are likely to pull out of your house and balance against renting.
We are San Francisco experts and happy to provide a no-strings consult on all the foregoing.
Lance King/Owner-Managing Broker
If you buy a property that is reasonably priced in SF without overbidding (multiple competing offers), then I personally believe that buying is the better choice than renting; But if you were involved in a hot property and you bought the hot property over 8 competing offers, then, I feel that you probably would have been better off staying a renter than overpaying.
I know someone who owns a property in SF Bay Area and only pays $811 a month for a mortgage; let me ask you this: would you rather pay $2,000. in rent or $811 a month and also own the property?
The choice is simple to me.
Peter Chin #01866332
Century 21 415-213-8220
San Francisco has rent control, it is great for renters.
The housing market in San Francisco is nicely moving up.
Prudent for you to wait till say June next year.
This question is actually a lot more complicated than simply buy vs rent. If we were advising you there are a lot of questions we'd ask you before giving a recommendation. Here are a few:
What is your financial picture and how secure is it?
What is your long range plan for residing in the property?
How soon before a potential move could be necessary?
If you are in a position where you might have to move soon, short of a huge downfall in prices I see nothing that indicates a large upward swing, so you need to make sure you find a place with some upside that won't be hard to sell. Those do exist in San Francisco, but they are not plentiful and you need someone great to find them and negotiate them to your favor.
If you are simply looking at reducing your monthly payment, that number should be fairly simple to figure out - look at what rents are in the neighborhood(s) you want to live in and run the numbers on a purchase.
Although no one knows where markets are headed, even though San Francisco prices have dropped from the insane highs of a few years ago the city has remained fairly bulletproof in value considering how much prices have dropped elsewhere.
I think with money so cheap right now you should at least sit down with your accountant to look at the tax implications of rent vs buy, and then if that picture looks good find a really knowledgeable Real Estate Broker like us or one of the other reputable agents/brokers who regularly post here to discuss your situation before ruling the idea out.
Lance King/Owner-Managing Broker
I might add that with the impact of the Fed Reserves QE2 policy we may be set for a dollar devaluation which you might want to consider if you are planning on holding "Cash".
A rule of thumb is that in inflationary times commodities become more valuable than cash.
However it takes capital to create inflation and
currently, very large amounts of U S capital are going to developing nations overseas primarily in Asia where inflation is rising and capital is seeing a large return.
So if your equity is a substantial part of your net you may want to consider holding on to your house or directing the proceeds into real assets, instead of holding your cash.
You can see more about QE2 if you are interested at my blog: http://www.trulia.com/blog/zmbrennan/
In the long run owning a home is normally seen as a wiser choice. With the recent decline in home prices, high unemployment and a general uneasiness about our future it's easy to understand why you or anybody else would be hesitant to purchase a home nowadays.
Here are a few items to think about;
* According to the Federal Reserve Bank of San Francisco (see link below, then click on PDF) by 2014 San Francisco will need to build an additional 12,315 Above Moderate income housing units to meet demand.
* By 2020 population growth in the state is expected to grow by 13% from 39 million to 44 million.
* Tech seems to be leading the way out of this recession and the Bay Area is obviously a major player in this arena.
* In SoMa available commercial space for tech companies is becoming relatively scarce.
* Recent signs of progress include Salesforce.com's $278 million investment in Mission Bay and Bosa has begun construction of phase two of Radiance.
* If/when inflation does kick in, owning a home will certainly be a good bet.
* The most obvious incentive is that interest rates are at historical lows.
By all accounts owning and or buying a home in the not to distant future will be much less tumultuous than it has been in recent years. But with that said, if you feel the need to sell and go into a rental then why not try it? You can always decide to buy again down the road. Talk to your accountant and get some professional guidance on the tax implications and what they think may be the best long term investment choice(s) for you. Maybe they will suggest a mutual fund etc.
Good luck on whatever you choose!
This is an important question and I am glad your are asking it. Many sellers may not realize that in selling a property in a down market, their actual loss may be much greater than initially expected.
Upon selling, you lose all future equity on the property. You are losing on the current lower market price as well your future return on investment. You are pulling yourself out of the equity stream not to mention loosing your income tax deductions.
To insure against these losses, it might be a good idea to reinvest in real estate at the same price level or higher. This way you are back in the equity stream while taking advantage of the current low fixed rates. You will also lock in your property taxes at today's market prices and reestablish income tax deductions.
Unless you are expecting another major drop in real estate prices (assuming that such an event will not affect your employment or purchasing power), renting can be a waste of your money.
Paragon Real Estate Group dre 1844627
This question is more a question for your accountant than the agent population. If you are a high earner there is no doubt that San Francisco is a great market to buy in. Little supply and high demand make it some of the most premium real estate in California. Consequently your money will not buy as much as in other areas. Also if your lifestyle is conducive to urban living (ie you work in the city and like to take advantage of the civic events and amenites the city offers) the city is a fine place to own. Even if you have to rent, rental laws are very favorable to tenants for lower income owners and if one can find a good affordable property, rent will enver go up on account of those same protections.
CLIMB Real Estate Group
(415) 846-6251 phone