OK, that’s why our numbers are different. We used different tax rates. To account for the Mello Roos, I used higher tax rates than what you used. For Del Sur, I used 2.2%. For north 4S, I used 2.075%. For south 4S, I used 1.525%. Those are all based on what I could calculate for the Mello Roos taxes from Redfin.
For example, I looked at a random house in north 4S. Here is the link from Redfin:
It’s been sitting for a month at a price range of $850,000 to $875,000. So lets assume they accept a bid slightly below that range, at $835,000.
We see that the HOA is $85/month. Meanwhile, under Fee Information, it shows Total Monthly Fee as $658/month, so I kluged it and said $658-$85=$573 a month in Mello Roos taxes. (The $573/month might include something other than Mello Roos but I didn’t dig into it). $573/month X 12 months = $6,876/year in Mello Roos. Assuming this house sells at $835,000, that is 0.825% Mello Roos tax. Giving total tax = 1.25% + 0.825% = 2.075%.
I went back and redid the calculation on the mortgage calculator you linked to. I assumed excellent credit and a 4.25% interest rate, to get a best case scenario. For an $800,000 house with 20% down, I got the following numbers:
Del Sur: $4,615 Principal+Interest+Tax. Add $85 for HOA and $200 for Home Insurance gives a total of $4,900/month.
North 4S: $4,532 + $85 + $200 = $4,817/month.
South 4S: $4,165 + $85 + $200 = $4,450/month.
Now add to this the various costs of owning a home. To me, it looks like the homes in 4S and Del Sur are relatively low maintenance, so that cost should be pretty low. (Relatively newly built homes, small lots, etc). But it would still add up over time.
I do agree that when you count the mortgage tax deduction, especially for the type of people who live there (i.e. upper middle class professionals with kids and very interested in tax deductions), it is likely to be cheaper than renting. I just doubt that it would really be $1,000 less than renting there.
I myself looked at a lot of homes in 4S in 2011, back when they were about $150,000 less than they are going for now. I liked the homes and the schools were highly rated. Plus it’s a very convenient and pleasant area. What I did not like was the high Mello Roos, the small lots, looking right into neighbors windows, and most homes lacked a decent view. I ended up buying elsewhere.
I keep an eye on 4S, however, since I can practically walk to work from there. My plan is to keep my current place and rent it out, and move to 4S if I can find the right home at the right price.
