Utah home value growth rate, once among nation's highest, on the skids

Utah's home-price appreciation, among the highest in the country three years ago, today is sixth-worst worst among all states.

Home values dropped 11.6 percent from the second quarter 2008 to the second quarter 2009, according to a report issued by the Federal Housing Finance Agency, a government

Utah is among 46 states with a home-price decline -- or negative appreciation -- during that time period. Nationwide, home values were off an average of 6.1 percent in the year that ended June 30, according to the agency's House Price Index report.

In the report released today, the biggest drop in home values was in Nevada, which registered a 28.1 percent decline in the year-over-year period, followed by Arizona (21.2 percent); Florida (17.6 percent) and California (15.4 percent).

Utah fared slightly better than Hawaii, where prices fell by a higher margin --11.7 percent -- but the Beehive State was slightly worse than Oregon, which had a decline of 10.6 percent.

Among about 300 metro areas, Logan had the highest ranking of all Utah areas, No. 38, with a home-price increase of about 0.7 percent. Spartanburg, S.C., was No. 1, with a nearly 3.5 percent increase over the one-year period.

Salt Lake City ranked a much-lower No. 223, with a 7.2 percent decline in prices. Provo-Orem fared even worse, at No. 235, with an 8.7 percent decline. St. George came in at No. 271, with a 15.4 percent drop in prices. In the metro areas, rankings are based on appraisals made during home purchases and refinancings.

Utah's comparatively low rankings contrast sharply with its stellar performance less than three years ago. The state first topped the nation in appreciation in the fourth quarter 2006 and remained at either No. 1 or No. 2, with double-digit annual increases in home values, until late 2007.

But by last year, smaller appreciation numbers gave way to no appreciation, and now, falling prices.

The real estate downturn, of course, is affecting most areas of the country to a substantial degree. Even North Dakota, which tops the nation in home price appreciation, saw only a 2.82 percent increase in values in the past year. Aside from Oklahoma and South Dakota, both of which had one-year appreciation of less than 1 percent, and Maine, where prices were up only 0.04 percent, there were no other areas showing any increase in value.

As in other parts of the country, Utah's housing downturn stems from tighter lending standards put in place after the subprime lending crisis. Another problem is the huge run-ups in prices years earlier that put home ownership out of reach of many families.

Today, lower prices, historically low mortgage rates and a federal incentive of $8,000 available to first-time home buyers are helping boost the housing market. But in many areas, including Utah, it's not clear whether the home-sale market has yet bottomed.

lesley@sltrib.com