Home-price appreciation in Utah jumps to 35th

Utah home prices have bounced back, signaling future price increases and a potential seller's market.

For the 12 months ended March 31, home prices here rose 6.28 percent, ranking Utah 35th among all states in the percent change in prices, according to the Office of Federal Housing Enterprise Oversight's house price index report.

As recent as the fourth quarter of 2003, Utah ranked dead last among all states and the District of Columbia in price appreciation.

Robert Farnsworth, an associate broker with Remax Associates and past president of the Salt Lake Board of Realtors, said in some instances he has seen home sellers close on deals at more than their asking price.

"We're starting to see multiple offers," Farnsworth said. "Good listings are selling fast. I had one in Davis County that I listed on Friday and sold it on Monday."

Farnsworth added that he sees the supply of homes for sale continuing to dwindle with strong demand.

"We still have incredibly low interest rates," Farnsworth said. "Our economy overall in the valley is very healthy. I think that is just going to continue to push housing. I really think that we're going to be in the top 20 next year."

Despite the higher prices, Utah continues to trail the U.S. average price increase of 12.50 percent.

Neighboring Nevada ranked first in the latest price appreciation report, released Wednesday, at 31.22 percent. Texas ranked last at 3.77 percent.

Patrick Lawler, chief economist for OFHEO, said in a prepared statement that the rapid price increases are a result of continued low interest rates, income growth and the apparent impact of speculation in some real estate markets.

"The rise in house prices continues at an extremely strong pace," Lawler said, "and raises the potential for declines in some areas later on."

The report shows varying price increases for Utah cities in its rankings of 265 U.S. metropolitan areas.

With a one-year increase of 18.47 percent, the St. George area ranked 49th on the metropolitan list. Salt Lake City ranked 159th with a one-year increase of 6.08 percent, while Provo-Orem came in 208th with an increase of 4.64 percent and Ogden-Clearfield was 225th with an increase of 4.21 percent.

In February, National City Corp. ranked Salt Lake City as the most undervalued housing market in the nation, showing a 23 percent discount.

Debra Sjoblom, president of the Salt Lake Board of Realtors, recently said that the report has drawn outside investors to Utah, contributing to higher prices.

The house price index measures average price changes in repeat sales or refinancings on the same properties.

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