Idaho among top in U.S. for home value appreciation rate

Home prices in Idaho rose the fastest of any state in the third quarter of 2006, according to a recently released federal report.

The Office of Federal Housing Enterprise Oversight said home prices appreciated 17.5 percent in Idaho compared with the same quarter in 2005. Utah was second with a 17.4 percent increase.

In Pocatello in eastern Idaho, home prices rose a record 14 percent in 2005, but this year have risen only 10 percent, said Mike Johnston, a real estate agent with Home Specialists.

"Nationally there have been several markets that have been going down in value," Johnston told the Idaho State Journal. "That's caused people locally to think our local values have gone down also. That's not true. We've been pretty happy with the appreciation that's happened."

He said that about 20 percent of home sales in 2005 came from new construction, but that it hasn't kept up with demand.

"We still have a shortage of homes," Johnston said. "When I put together a list of homes to show my clients, I still don't have the inventory."

Part of the reason is that out-of-state investors have found Pocatello to their liking, said Gilbert Salazar, a real estate agent with Century 21.

"Pocatello is one of the only places where you can find multifamily dwellings at a decent price that will cash flow," Salazar said. "It seems like in the last 21/2 years, the world has found out about Pocatello and how nice it is here."

He predicts that homes in Bannock County will appreciate about 8 percent.

"We just don't have the highs and lows the bigger markets have had in the last two years," Salazar said. "In Arizona, they were on a housing boom for a long time, and now their property values have dropped off dramatically."

With the increase in home prices, affordable housing has become harder to find.

"Five years ago, it was nothing to pick up a decent home for $85,000 to $90,000,” Salazar said. "Now those homes are in the $125,000 range."

One couple who benefited from the appreciation rate in Pocatello is Mike and Jennifer Hardy. They recently sold their home for $300,000, about $136,000 more than they paid for it three years ago.