Utah's home prices tumbled in 2nd quarter

The price of homes sold in Utah fell almost twice as much as the national average in the second quarter, according to a government report released Tuesday.

The Federal Housing Finance Agency Housing Price Index showed Utah ranked 46th out of the 50 states and the District of Columbia, with Utah prices depreciating 11.6 percent during the second quarter of 2009, compared with the same period last year.

The nationwide depreciation average was 6.13 percent, the report stated.

As recently as 2006, Utah boasted four of the fastest-growing counties in the nation in terms of housing units, according to the U.S. Census Bureau.

And Utah had the largest year-over-year increase in home prices in the third quarter of 2007. The rate was nearly 13 percent at that time, according to the Office of Federal Housing Enterprise Oversight. Four of the state's metropolitan areas were among the top 11 in the nation for home-price increases.

But today that trend has changed dramatically.

A local economist said the fact that Utah is trailed primarily by other Western states — Hawaii, California, Florida, Arizona and Nevada — in terms of sales price declines could indicate a strong geographical component to the state's housing woes.

"Utah is definitely suffering from its proximity to some of the hardest-hit areas of the country," Kendall Oliphant, senior vice president of Thredgold Economic Associates, told the Deseret News.

He said how the state's housing market responds in the future depends upon the improvement of Utah's employment situation and consumer confidence in the overall economy.

"If there is a sense that we are at the bottom (of the housing decline), then we're going to see more people jump into the market, which is going to drive prices up," he said. "So it will be interesting to see what happens in the next few months."

Only one of the Beehive State's five top metropolitan statistical areas — the Logan area, which in the study includes southern Idaho — saw appreciation in the seasonally adjusted purchase-only index based on data from home sales, according to Tuesday's report.

Logan ranked 38th out of 296 MSAs, with prices increasing 0.73 percent year over year during the second quarter. However, prices fell 0.38 percent from the first quarter of this year.

The Ogden/Clearfield area saw sales prices drop 3.93 percent year over year, ranking 176th, and declined just over 2 percent from the first quarter.