Housing prices climb

Utah housing prices continued a double-digit climb in this year's second quarter, pushing the state to a No. 10 ranking for price appreciation.

But there are signs that local home prices could be nearing a peak.

Housing prices across Utah rose an average 15.17 percent in the three months ended June 30 compared to the same quarter in 2005, according to data released Tuesday by the U.S. Office of Federal Housing Enterprise Oversight.

Nationally, housing prices appreciated at a slower 10.06 percent rate in the second quarter compared to the second quarter of 2005, the report said.

In a sign that Utah's housing frenzy also might be at a turning point, the state's second quarter appreciation rate was less than a half percentage point higher than the first quarter's average rate of 14.68 percent.

In addition, housing prices in the St. George metropolitan area have started to soften. In the first quarter, St. George had the highest house-price appreciation in the country at an average rate of 38.40 percent. In the second quarter, St. George's appreciation rate fell to 25.15 percent, ranking No. 8 nationally.

Allan Carter, director of developer services for Southern Utah Title Co., a St. George-based company that tracks real estate trends, said home prices continue to rise in St. George and throughout Utah simply because there is an absence of inexpensive product in the pipeline, namely homes priced below $300,000.

"Absolutely, the market has turned down here," Carter said. "There are whole subdivisions filled with spec homes that in one case don't have a single home sold."

Carter blames southern Utah's wild housing ride on real estate investors, who bought up hundreds of properties with the intention of flipping them. Last summer, roughly 40 percent of people purchasing properties in the St. George market were investors, Carter said.

And Carter believes the Salt Lake region is prone to what he calls a "train wreck" now hitting Las Vegas and Phoenix. His advice to people looking to buy a home in the Salt Lake region is to wait until next fall.

"You guys are going to hit the wall between April and June next year," Carter said. "It's a huge problem."

Still, Jeff Thredgold, an economic consultant to Zions Bank, remains optimistic about Salt Lake's outlook.