Home prices soar
Utah is No. 1 in U.S. with 17.55% jump in 4th quarter of 2006
At 17.55 percent, the state's house-price appreciation was nearly triple the national rate and was the highest of all states and the District of Columbia in last year's fourth quarter compared to the same quarter of 2005, according to a new report by the U.S. Office of Federal Housing Enterprise Oversight.
Wyoming ranked No. 2 at 14.29 percent, and Idaho came in third at 13.99 percent.
Some Utah cities posted even stronger gains.
The Provo-Orem and Salt Lake metropolitan areas ranked Nos. 3 and 4, respectively, for appreciation in the fourth quarter among 282 U.S. cities. Ogden placed No. 14 at 15.30 percent, while St. George showed appreciation of 12.30 percent, ranking No. 28.
"I think that the last two years have been very strong in our market after having three relatively flat years," said Debra Sjoblom, a real estate agent with Salt Lake-based Chapman and Richards. "I think we are still in a very stable situation. I think it's certainly a great appreciation but not so great that we're running any risk of having it tumble."
As recently as the second quarter of 2004, Utah ranked dead last among all states and the District of Columbia in house-price appreciation.
Santa Barbara, Calif., was down 4.20 percent in the fourth quarter compared to a year earlier. And the Reno-Sparks, Nev., area showed a nearly 1 percent drop in home prices for the same period. Of all states, only Michigan showed an overall decline in housing prices at 0.44 percent.
"In some sense, what we've seen over the last year or two has been unsustainable," said Andrew Leventis, an economist with OFHEO. "It was just a matter of when the appreciation rates were going to fall."
Leventis cautioned that Utah's double-digit price gains, like those in other states, will only last so long.
"Unless income growth really picks up in your area, 18 percent is definitely unsustainable over the long term," Leventis said. "But at the end of the day, Utah house prices relative to income are relatively affordable."
Utah's average wage in 2006 was $34,600, a 5.4 percent increase over the previous year, according to a state economic report. It was the highest level of wage growth in 14 years. However, per capita personal income in Utah is just 80 percent of per capita personal income nationally.
Dan Bodily of Lehi, owner of Blue Ridge Cabinets and a homebuilder, said he is unsure whether Utah's appreciation rates are sustainable.
Bodily said he has more work than he can handle, but most of it is for investors hoping to make money on speculative homes yet to be sold.
"I think the market is being flooded with spec properties at the moment," Bodily said. "The builders are making good money right now because they get their money up-front. But I wonder what is going to happen with all these investors."
For now, Utah homeowners and builders are riding the housing wave, hoping it will last amid a national slowdown.
The house-price index is based on transactions involving conforming, conventional mortgages purchased or securitized by Fannie Mae or Freddie Mac. Only mortgage transactions on single-family properties are included. The index measures price changes in repeat sales or refinancings on the same properties.
E-mail: danderton@desnews.com
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Post Script - So how do like this article now? Things change...huh...
TOT | Jan. 20, 2008 at 2:50 a.m.
