The economic events of the past few years have spurred more than a few Bay Area residents to become renters rather than homeowners. After all, they reason, that way they’re not tied to an asset that may become devalued. That however has not been the case in the base area as our average home values have increase anywhere from 25% – 40+% depending on the city.

And with the demand for homes being two to one the market is outstripped, renting seemingly offers more flexibility and immediate gratification.

Well, not so fast.

It turns out that would-be renters may have as many – or even more — challenges than prospective homeowners. Let’s take a look at the state of rental housing in the Bay Area.

1. Rents are sky-high – and climbing

According to a new study by the National Low Income Housing Coalition, rents in much of the Bay Area are the least affordable in the country. A study, called Out of Reach 2012 -2013, recently found that the most-expensive counties in the United States – tied for first place, in fact — are San Francisco, Marin, and San Mateo.

Over the past four years rental prices have climbed between 13% and 23% in the San Francisco Bay Area.

Should you buy instead of rent?

Would-be apartment dwellers who haven’t been able to find a reasonable rent in the Bay Area don’t have many options outside the standard ones: split the rent with a roommate or two, move further away from the priciest areas, look at alternatives such as renting a room instead of a full apartment, and so on.

There’s another option that may be in reach for some: buy instead of rent. In today’s market conditions, it may make financial sense to explore this option. In fact, the national media will tell you it’s almost always better to buy than rent these days – with the caveat that this doesn’t necessarily hold true for, you guessed it, San Francisco. (Or for the other top-priced market out there, Honolulu.)

But it’s still possible to make the math work in the Bay Area. With restrictions on mortgages easing, and interest rates at near-record lows, you can end up with a home that represents an investment and equity, rather than simply shelling out cash for a rental with nothing to show for it.

For example, suppose you’re looking  for a 3-bedroom, 2.5-bathroom option with a two-car garage.

• Option 1: Rent a 1,350-square-foot home for $3,300 a month.
• Option 2: Purchase a 1,600-square-foot home  (list price: $979,000) for $3,197.35 a month.*

*This assumes a 5/1 adjustable rate mortgage at 2.75% with a 20% cash down payment and doesn’t include insurance or property taxes in the calculation.

So it makes sense to explore your purchasing options before you resign yourself to paying ever-increasing rents.

Woodside Home Eclectic Exterior by Oakland Architects & Building Designers Cathy Schwabe Architecture. Photo by David Wakely.

KITCHEN MOST IMPORTANT ROOM, HOME BUYERS SAY
If you’re preparing your home for sale within the coming months, you’d do well to pump a healthy portion of improvement funds into the kitchen, a new survey finds.

According to the poll conducted by homebuilding firm PulteGroup, 29 percent of respondents said the kitchen was the most important room to consider when purchasing a property. Twenty-three percent said an eat-in area was the top kitchen feature, while 22 percent cited the importance of an island.

The survey notes that spice kitchens are becoming particularly en vogue with California buyers. In Silicon Valley high-end kitchen appliances and countertops greatly appeal to home shoppers.

PulteGroup’s study also discovered that more than one-third of buyers say coveted home amenities trump location and even schools.