Based on 2006 housing costs, the cost of renting in the Phoenix area averages $862 while the average cost of owning can range from $1,343 to $1,804, depending on interest rates, the report said. That means that Phoenix rental costs can range from 47 to 64 percent of ownership costs.
The report says that when ownership costs exceed 50 percent, it indicates a bubble. Some "extraordinary" gaps include New York City, where it costs 109 percent more to own a home than to rent; San Diego, 133 percent; San Francisco, 161 percent; and Los Angeles, 168 percent.
You can argue that some of these places are special and unique enough that long run housing price appreciation rates might be higher in them. But these prices have built in stupid levels of expected appreciation and will come down before they go back up.