PROVO — From Santaquin to Alpine, the housing market is hot.

How hot?

Three years ago, a $250,000 home was a premium home in Utah Valley. Now, the average sale price of a Utah County home is $254,000.

In fact, the number of valley homes sold for at least $500,000 jumped from 95 three years ago to 368 last year.

Real estate expert Kevin Call now tracks the valley's high-end housing market by counting the million-dollar homes: 44 sold last year, 73 on the market right now.

The surge is raising prices at the bottom end of the market, too, great news for homeowners but bad news for would-be homebuyers who now can't afford most of the homes in Utah Valley, said Call, executive vice president for the Utah County Association of Realtors.

How bad is the affordability gap?

Only 3 percent of homes on the market right now are listing for less than $160,000. And 90 percent of all homes on the market this week list for $200,000 or more.

"That's an affordability problem in our marketplace," Call told the Provo Kiwanis Club on Tuesday. "If you are a schoolteacher in the Alpine School District with five years' experience and a master's degree, you can't qualify for 90 percent of homes on the market unless you have a second job or a spouse that works."

Don't expect new construction to ease the problem, either.

"You can't find a new construction home for under $160,000," Call said. "Even downtown Eagle Mountain has passed that threshold."

The reason is a stark leap in lot prices. For example, in 2004, a lot in the Val Vista subdivision in American Fork sold for $75,000. Last year, a nearby lot that was the same size sold for $149,500.

The lowest-priced, developed single-family lot listed Wednesday in Santaquin, one of the most affordable cities in the valley, was $67,000 for .17 acres.

The affordability situation is compounded by a low inventory: Only a small supply of homes are for sale for less than $160,000 or even up to $200,000.

"The group that can handle the least competition is facing the most competition," Call said of lower-income homebuyers.

The good news is that homeowners are seeing an excellent return on their investments.

Last year, half of all single-family homes in Utah Valley sold for more than $213,075 in 2006, and half sold for less. That median sale price was up 33 percent from $160,000 at the end of 2004.

The median price in Orem jumped from $151,525 to $180,000 over the same period. In Provo, it went from $143,450 to $170,000. The highest appreciation was in the Highland-Alpine area, where it grew roughly 23 percent last year alone.

"I expect 2007 to be approximately the same in unit sales as it was in 2006," Call said. "I expect prices to increase, but certainly not at 22 to 24 percent. Our market is beginning to settle, to stabilize a bit. I believe that's healthy for our market."

One reason is new construction. More building permits were issued in Utah County in 2006 than ever before. Even Provo hit an eight-year high, Mayor Lewis Billings said recently.

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E-mail: twalch@desnews.com