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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: redfish who wrote (45755)	12/14/2005 12:01:56 PM
From: Jim McMannis	Respond to of 306849

Mountain states enjoy hefty home price gains By Sue Kirchhoff, USA TODAY Wed Dec 14, 6:35 AM ET Real estate has become a hot commodity in parts of the Mountain West, as absentee investors seek comparatively cheap property and families move to the region from higher-priced areas, realtors and economists say. Home prices in Coeur d'Alene, Idaho, jumped 29.9% from the third quarter of 2004 through the same period in 2005. St. George, Utah, saw 31.6% price gains - the fourth fastest in the nation, the Office of Federal Housing Enterprise Oversight says. (Chart: Home price changes in 265 metro areas) Utah, which ranked dead last in terms of home price gains at the end of 2003, was the 22nd-fastest appreciating state. Idaho home prices rose 15.1% during the period, moving it to the rank of the 12th-fastest appreciating state. Overall, the Mountain region saw better than 16% price gains, faster than the national rate of 12.0%. "A big part of it is a lot of outside investors. We actually have a large number of people coming in and paying cash for a property," says Todd Sankovich, chief operating officer for Century 21 Beutler and Associates in Coeur d' Alene. Sankovich says a quarter of his customers this year are from California. They're a mix of outside investors and people who made a nice profit by selling homes in the higher-priced state. The average price of a home sold through Sankovich's firm is $190,000. The median home price in California was nearly $540,000 in October, the California Association of Realtors says. Keith El Bakri, a broker at ReMax First Realty in St. George, Utah, says his local market also includes a big chunk of investors and California transplants. One investment adviser El Bakri works with has bought multiple homes in the area. But El Bakri points to strong economic growth in the area, which is located in a scenic part of Utah near national parks and outdoor recreation. Bob Visini, president of marketing at LoanPerformance, a subsidiary of First American Real Estate, says it's clear investment buyers are having a major impact in some areas. In Boise, for example, 20.5% of homes bought from January through September were for investment purposes and 8.7% were purchased as second homes. Nationally, investment buyers average 9.6% of purchase loans, and second-home buyers 7.3%. Sales have slowed somewhat in both Idaho and Utah since the OFHEO numbers were released Dec. 1, partly due to a seasonal slump. Sankovich expects the market to pick up, "but instead of ridiculous growth, you'll get sort of average growth." Nationally, the question is whether the housing market is slowing from the torrid pace of the past five years. "What we saw is a modest slowdown in our latest quarterly data, but in the past we've seen slowdowns of this magnitude completely reverse in short order," says OFHEO chief economist Patrick Lawler. What could make the situation different this time is rising interest rates, a growing inventory of homes on the market and the fact that homes are becoming unaffordable in some U.S. regions.