Utah Home Prices Show Remarkable Turnaround
Those that sought a Utah mortgage three years ago? They were faced with homes depreciating at record rates.
Now, however, the state’s home price appreciation - the worst in the country in 2003 - is the best nationwide.
Home prices statewide rose 17.6% from the fourth quarter of 2005 to the same quarter of 2006, according to a report released this week by the Office of Federal Housing Enterprise Oversight, a government agency that tracks housing values.
Nationally, home prices rose only 5.9% during that time period, reflecting the downturn seen in cities that have experienced a rapid run-up in prices in recent years. Meanwhile, housing prices in all of the Utah housing markets posted major gains in the past year.
The Provo-Orem metropolitan area had the third-highest appreciation among 282 cities in the survey, with a 19.9% increase in home values. Other figures include:
- Salt Lake City was No. 4, with a 19.8% increase
- Ogden-Clearfield was No. 14, with a 15.3% increase
- St. George was No. 28, with appreciation of 12.3%
The increases over the past year alone have made it increasingly difficult for mortgage loan borrowers to find homes - or condominiums - in the Salt Lake Valley that sell for less than $200,000.
In Salt Lake County, median selling prices are $225,000, according to 2006 data from the Salt Lake Board of Realtors. Utah County’s median is $212,900, followed by Davis County ($197,500.) However, regions are still fairly affordable Utah mortgage rates are expected to fall as the year progresses.
Nevertheless, strong home value gains in the state undoubtedly have made it more difficult for some families, especially those with low and moderate incomes, to buy their first home now. But many other families have benefited from the home-price appreciation — especially those who purchased their properties several years ago.
The Wasatch Front housing market last peaked in the early to mid-1990s, when home sales, buoyed by the state’s strong economy and job growth, rose dramatically and values increased by a larger margin than any other state. By the late-1990s, though, the market had slowed considerably, and in the years that followed, housing values in many areas of the state barely budged or increased only slightly.
By 2005, home prices began to climb once again as Utah’s economy began to boom. Much of Utah’s current real estate boom has to do with the state’s strong job market, said Andrew Leventis, economist with Office of Federal Housing Enterprise Oversight. Job growth in the state, among the highest nationally, is expected to continue strong through this year and next.
“Employment and house prices are closely linked,” Leventis said.
SOURCE: RISMedia