Home costs in Utah see a big jump

Utah's housing market just got hotter, as a new report shows the state moved up to a top-20 ranking for price appreciation.

Home prices here rose an average 13.36 percent in the fourth quarter of 2005 compared to the same quarter in 2004, moving Utah to a No. 18 spot among all states and the District of Columbia in house-price appreciation, according to a quarterly report released Wednesday by the U.S. Office of Federal Housing Enterprise Oversight.

Utah's average rate of appreciation surpassed the U.S. rate of 12.95 percent. And with home prices climbing 35.27 percent, St. George continued to hold its No. 4 appreciation ranking among 275 U.S. cities in the fourth quarter of 2005 compared to the same period a year earlier, the report said.

Utah's double-digit appreciation gains in 2005 have not been seen since the mid-1990s, when average annual housing prices rose 11 percent to 17 percent. The climbing values are transforming the Wasatch Front into a seller's market, according to Sharon Spratley, president of the Salt Lake Board of Realtors. She said multiple offers on properties are commonplace, and offers above list price are becoming more frequent.

"We are seeing healthy appreciation, but we are certainly not out of control," Spratley said. "We have moved up on appreciation, but remember that we are still behind the country when it comes to pricing."

Andrew Leventis, an economist with OFHEO, said the Mountain region now leads other areas of the nation in house-price percentage gains, outpacing strong increases in the Pacific area.

"Utah continues its rise to the upper echelons of states in terms of house-price appreciation," Leventis said. "Utah, Idaho and Arizona are showing particular strengths in house-price appreciation."

Arizona showed the highest appreciation in the country at 34.90 percent. Florida was No. 2 at 26.83 percent, followed by Hawaii at 23.85 percent. Idaho ranked No. 9 at 18.64 percent. Michigan had the lowest appreciation at 3.76 percent.

"We certainly don't see any significant signs of cooling throughout the country," Leventis said. "There are areas that are slowing down, but as a whole, the house prices across the nation seem to be proceeding at their usual recent pace."

Mike Petersen, a real estate developer in Wasatch County, said home prices at his high-end Cobblestone development, located two miles east of Heber City's Main Street, have shot up 25 percent in the past 12 months.

Petersen's homes a year ago were selling for $300,000 to $500,000. Now they go for $400,000 to $650,000, he said.

"We have 127 homes in this development, and we're down to just two properties left, and we'll probably sell those out within the next seven to 10 days," Petersen said. "About 80 percent of our buyers are coming in from out-of-state."

Spratley's advice to homebuyers is simple.

"When they see something they need to jump on it," he said. "It's a great market, and people who want to buy, I would certainly say don't wait."

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E-mail: danderton@desnews.com