Of course that's assuming housing prices never go down. That never happens...right?

What? If housing prices go down to 0 the money you've paid for your house is gone. But the money you paid in rent is gone either way.

There are plenty of situations where renting leaves you financially better off than owning. Even in a market where housing prices are going up.

Tax decreases linearly with the price of the property. At any rate, rents and taxes are sufficiently linked that tax can be ignored for the comparison.

As for interest and PMI (assuming you need to pay it), I'd say housing prices falling far enough where rents start looking attractive compared to these qualifies as "something deeply wrong".

Why would tax decrease linearly with the prices of the property? The residential property taxes I've seen are just a flat percentage of assessed value.

Exactly, which means the taxes have a linear relationship to the value. If my house value goes down by 40%, my property taxes go down by 40%.

Ah, I see. I thought you meant tax rate decreased as the price increased. My misunderstanding.

The general rule is you buy if the rent to price ratio is lower than 15. It's currently ~35 in SF.

Between Prop 13, rent control, and NIMBYism I would say there is something deeply wrong with the SF real estate market. It is terribly distorted and I want nothing to do with it, as either buyer or renter.

rent divided by price? As the price increases you become more likely to buy?

Also, the monthly rent?

Price divided by annual rent.

$200K house than can rent for $20K per year has a rent to price ratio of 10. It would be wise to buy in this market.

Sice housing prices should be linked to what they can rent for, it's a check to see if the two are aligned.