The ten-second version
Take a home's price, divide by the annual rent of its equivalent (price ÷ (monthly rent × 12)). Under 12: buying territory. 12–20: it depends on tenure and rates. Over 20: renting tends to win. The rent-equivalent calculator computes it precisely — but you can eyeball it on any listing pair.
Why it works
The ratio compresses everything that matters: what the local market charges for owning vs renting the same shelter. High ratios mean ownership is priced as a premium product (speculative appreciation or supply constraints); low ratios mean rents are high relative to prices — often a landlord-favorable market where buying is simply cheaper per month of shelter.
Where the ratio misleads
It ignores your tenure (a 15× market still punishes a 2-year stay) and rate environments (high rates push the neutral point higher). Treat it as the first screen, then run the full comparison with your inputs. And remember it is a market statistic — one street can break the pattern.