Joint study between FAU and FIU shows rise in property prices

Real estate costs are higher than pre-recession levels.

Photo+courtesy+of+FAU.+

Photo courtesy of FAU.

Benjamin Paley, Contributing Writer

If you are looking to buy or rent a house in the near future, you should expect higher than usual price tags, according to the latest national index produced by Florida Atlantic and Florida International University business faculty.

The study is designed to signal whether or not market conditions favor buying or renting real estate. The index summarizes 23 major city housing markets along with the the U.S. real estate market as a whole to provide the most accurate analysis of housing costs.

FIU College of Business assistant professor Eli Beracha, FIU business professor William Hardin III and associate dean and professor in FAU’s Finance Department Ken Johnson conducted the study.

According to an FAU press release on the index, faculty members from both schools found that home prices are at an all-time high and surpass the price highs from before the financial crisis in 2008.

“Record high home prices in the U.S. housing market are being driven upward by rising rents in cities across the country,” the release stated.

For college students, this means higher rental costs, which place pressure on the housing market that caters to students.

“One of the toughest questions Americans have to face is whether they should rent or if they should buy,” said Johnson. “But really the question should be are you going to create more wealth through renting and reinvesting or buying and building equity?”

Johnson said helping students figure out whether or not they should buy or rent property is one of the reasons why the index was created.

Real estate price website Trulia states that market trends in the city of Boca Raton show a 13 percent increase in median home sale prices over the past year. The average rental cost went up to $2,537 in December from $2,300 at the start of the year in January.

The index is reproduced two months at the end of every financial quarter.

Benjamin Paley is a contributing writer with the University Press. For information regarding this or other stories, email [email protected] or tweet him @benpaley92.