This is an archived article that was published on sltrib.com in 2006, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

Nancy Cygan is home-shopping in Salt Lake City this week, wedged between two worlds.

Her house in the Chicago suburb of Roselle, listed at $369,900, has been shown only once since May, despite its moderate price and proximity to an airport and train stop. Then there is Utah.

"I never thought, leaving Chicago, that I would not be able to afford something comparable in Salt Lake City," Cygan said Wednesday as she scouted homes with her sister, a Utah real estate agent.

Three years ago, Utah's housing market was the weakest in the nation. Today, it is second only to Idaho.

Home prices in Utah rose 17.4 percent during the three-month period ending Sept. 30 compared to a year ago, according to statistics released Wednesday by the Office of Federal Housing Enterprise Oversight. The jump boosted the state from 10th to second best nationwide. In addition, three Utah cities - St. George (9), Salt Lake City (10) and Provo-Orem (18) made the top 20 list of metropolitan areas.

Nationally, year-over-year home prices rose at a much slower rate of 7.7 percent, reflecting a slowdown in markets that grew too fast. California, for example, saw prices decline in more than half its cities.

The numbers, which measure average house price changes in repeat sales or refinancings of the same single-family properties, help housing economists estimate changes in the rate of mortgage defaults, prepayments and housing affordability in specific geographic areas.

When appreciation increases a lot, as it has in Utah, renters are the big losers, forced to pay more with none of the benefits of ownership. And homeowners, even those not looking to sell, benefit. That's because as a home appreciates so does the owner's sense of wealth, which inspires additional confidence and spending, said Salt Lake City economist and Zions Bank consultant Jeff Thredgold.

In which case, Utahns were not feeling particularly confident during the early part of the decade, when the state missed out on the housing boom that occurred in states such as Arizona and Nevada.

It was only a matter of time before Utah caught up, Thredgold said. But going from dead last to No. 2 is "amazing," he said, noting Utah does not attract the same level of speculation - investors who buy and flip properties for profit - as places like Nevada and Arizona. Rather, housing prices here are a reflection of a raging economy, a tight labor market and a steady flow of newcomers, he said.

"People have been cashing out in places like San Diego and Phoenix and going to Boise, Salt Lake and Twin Falls where they can get twice the house for half as much money," Thredgold said. "But someone in Austin or Atlanta would be stunned at what they would have to pay to live in Salt Lake City."

Or, say, someone in Logan.

While St. George, Salt Lake City and Provo-Orem all climbed the list of highest home appreciation, Logan dropped from 126th to 158th. During that time Jeremy Pugh, an arts editor at the Logan Herald, landed a job at Salt Lake Magazine, and he and wife, Lisa, started scouting for a home in Sugar House.

"I was like, 'Whoa, are you kidding me?' There were these bungalows and they were cute, but they were teeny. We finally upped our price range."

They sold their home in Logan for $140,000 and paid $260,000 for a 1914 Victorian in Sugar House.

"We now have twice the house payment for a smaller home," Pugh said. "We bought high, basically, and we're just hoping our value will continue to appreciate."

Don't count on it, says Salt Lake City real estate agent Bob Plumb. The market already is softening, Plumb said, and while some of the slowdown is seasonal, sellers aren't as brazen as they were six months ago.

"Sellers used to just add 5 to 10 percent onto the value and get it," Plumb said. "Now pricing is a little more critical."

Joan Taylor, a real estate agent with RE/MAX, echoed Plumb, saying it used to be that houses registered to be part of a home tour would sell before the tour began. Which is why she's advising her sister, Nancy Cygan of Chicago, to be patient - and to steer clear of Idaho.