From Deseret News archives:
Leading the pack: Utah is first in nation in house-price appreciation
It was the second consecutive quarter Utah held the top spot, according to a report Thursday from the U.S. Office of Federal Housing Enterprise Oversight.
In the three months ended March 31, Utah home prices climbed 17 percent when compared to the same quarter in 2006. From last year's fourth quarter to this year's first quarter, Utah homes appreciated 2.77 percent, the report said.
Three Utah metropolitan areas also ranked among the five highest appreciating among 282 U.S. cities. The Provo-Orem area took the No. 2 spot at 19.67 percent. Salt Lake City came in third at 19.12 percent, and the Ogden-Clearfield region was fifth, with homes appreciating at 15.7 percent.
The No. 1 slot went to Wenatchee, Wash., at 25.6 percent.
Nationally, homes appreciated 4.25 percent during the first quarter compared to the first quarter of 2006.
But while Utah homeowners may be cheering their new equity, Kelly Matthews, executive vice president and economist at Wells Fargo in Salt Lake City, warns that Utah's high home prices are becoming out of reach for many buyers.
"In order to move those homes, in my opinion it would be far better to at least flatten out the price increase," Matthews said. "If we had come in at the national average, I would have had more conviction that a year from now we would be building more homes than we will be if we continue to have 17 percent home appreciation."
A separate report in May by the University of Utah's Bureau of Economic and Business Research said that for the three months ended March 31, permits issued for new houses, condominiums and apartments in the state fell to 5,267, a 13 percent drop from the number of permits issued during the same quarter in 2006.
Timithy Reid, a Sugar House resident, calls Utah home prices "outrageous."
"I'm looking at homes on the east side that are $450,000 that are two-bedroom homes," Reid said. "Unfortunately, it seems like we have to go all the way out to Magna or Tooele to buy a home and commute. I think that it is going to get worse."
Reid, who is newly engaged, said it will take at least two years before he is in a position to buy a home.
Shelly Weiss, executive director of the Park City Community Outreach Center, a nonprofit organization that specializes in low-income housing, said entry-level homes in Summit County are nearly a thing of the past.
"Unless you have a federally funded subsidized program where people can qualify, it's almost impossible to get into homeownership," Weiss said. "At the very bottom, Summit County homes are going for $400,000."
