The state had a 6.6 percent drop in home values, or negative appreciation, from the fourth quarter 2007 to the fourth quarter 2008, a new report shows.

Utah had the 16th-largest drop nationally in the report issued by the Federal Housing Finance Agency, which tracks state values based on appraisals made during home purchases.

The biggest drop was in Nevada, which registered a 28.2 percent decline in the year-over-year period, followed by California (25.5 percent), Florida (24 percent) and Arizona (20.6 percent). Utah fared better than Oregon, where prices fell by a higher margin -- 7.1 percent -- but was slightly worse than neighboring Idaho (6.5 percent).

Among nearly 300 metro areas, Logan ranked No. 32, with a home-price increase of nearly 2 percent. Decatur, Ala. was No. 1, with a 6.6 percent increase.  Salt Lake City ranked No. 171, with a 3.4 percent decline in prices, followed by Provo-Orem, at No. 191, with a 4.5 percent decline. St. George ranked a dismal No. 248, with a 13.3 percent drop in prices. In the metro areas, rankings are based on appraisals made during home purchases and refinancings.

Nationwide, home values are off an average of 8.3 percent, according to the agency's House Price Index report.  Utah's comparatively low ranking contrasts 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.
 

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

"Conditions have deteriorated in Utah, " said Andrew Leventis, senior economist with the Federal Housing Finance Agency. He noted, however, that very few areas of the country have escaped the effects of the housing downturn.

Even North Dakota, which tops the nation in home price appreciation, saw a less-than 2 percent increase in values in the past year. Aside from Wyoming, which had a 1.5 percent increase, all other states either had no appreciation or various degrees of home-price declines.

Over the five-year period that ended in December, Utah's increase in home values of 43 percent is still among the highest of all states. But the state's real estate downturn started at least two years after most other states, which means its total housing market "correction" may eventually be similar to other states in the West.

As in other parts of the country, Utah's housing downturn stems from tighter lending standards put in place after the subprime lending crisis. And despite low mortgage rates, years of home-price run-ups in recent years have put home ownership out of reach of many Utah families.