"Part of the decline in 2006 was that prices jumped roughly 20 percent in our market," Thredgold said. "There are people at the margin that might have qualified before who didn't qualify when prices went up. It's a kind of shrinking of the possible buyer pool as prices jump sharply."

Thredgold said the state's construction jobs are not at a major risk of being lost because of the upturn in commercial, office and industrial construction.

"When you're talking about a $1 billion project downtown, that tends to support the commercial market," said Thredgold, who was referring to the City Creek Center currently under construction. "You have a lot of commercial projects taking place in various parts of the valley."

The U. report noted that the value of residential construction in 2006 reached $5 billion, up 6.3 percent from $4.7 billion in 2005. Nonresidential construction in 2006 was at $1.6 billion, up 30 percent from $1.2 billion a year earlier.

According to a separate report Thursday from the National Association of Realtors, existing U.S. home sales in the fourth quarter of 2006 fell to 6.24 million units, down 10.1 percent from 6.94 million units sold in the fourth quarter of 2005.

The NAR report said the Salt Lake area ranked No. 2 in the fourth quarter for the largest single-family home price increase. Salt Lake's median price was $223,600, up 22.7 percent from the fourth quarter of 2005. Atlantic City, N.J., ranked No. 1 at $339,800, up 25.9 percent.

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E-mail: danderton@desnews.com