While most students are now able to breathe after final exams, FAU professors are saying homeowners in select cities may become a little more stressed.

The housing market in Houston, Dallas and Denver is nearing a price bubble (a decrease in demand, or increase in supply), that could decrease the values of homes in those areas, according to a new report called the BH&J index.

The index — named after the authors Eli Beracha, William Hardin from FIU and Ken Johnson from FAU — studies 23 major cities and is designed to show whether there is more financial benefit from buying or renting a home.

“Prices are rising too fast in these cities and there are no underlying fundamental changes in their economies to support current pricing,” Ken Johnson, one of the index’s authors and a professor in FAU’s College of Business, said. “The U.S. housing market across the board is moving toward rent territory.”

As the market moves towards renting, it can pose problems for the value of homes.

“Houston … fared pretty well during the collapse,” Johnson said. “Unfortunately, Houston is now leading the pack in terms of renter friendly markets, which is not good in terms of future expected housing prices.”

“A continuation of rapid and dramatic price increases in these real estate market places will almost certainly lead to pricing bubbles and resulting local real estate crashes,” Eli Beracha, an author of the index and a professor of business at FIU said. “On the other hand, a slowdown in pricing in these areas should allow these cities to pull back from the edge.”

Housing bubbles are created when there are a lot of properties in the market, and there are not as many buyers, explained Alexa Rosario, a former FAU student who sells homes in South Florida.

“Real estate market works like it’s subject to supply and demand laws,” Rosario said. “When you have a lot of properties in the market, and there’s not as many buyers, prices go down.”

The bubble bursts when the demand for houses begins to decrease, but supply is still increasing.

Despite a national trend towards renting, Chicago, Cincinnati and Cleveland all show favor toward buying.

Other cities are a toss-up. Miami, Honolulu, Pittsburgh, Portland, San Francisco and Seattle are tied between renting and buying a home.

That decision however, comes down to a buyer’s needs, according to Rosario.

“A lot of people are in a situation where they have to rent,” she said. “It really just depends on their needs.”

Rosario also sees that a lot of people don’t buy homes, since they don’t see like affordable options, but that isn’t always the case.

“People don’t understand how easy and affordable a house can be,” Rosario said. “Real estate is the safest investment, as long as you keep it long enough.”

To check out the full statistics of the index, visit: http://business.fau.edu/buyvsrent

Gregory Cox is the managing editor of the University Press. If you would like to contact him regarding this or other articles, email him at [email protected], or follow him on Twitter.