After years of watching home prices escalate in Las Vegas, Phoenix and other hot cities, Wasatch Front homeowners finally are enjoying one of the best real estate markets in a decade.

Both home sales and prices - which had been flat much of the last several years - rose significantly along the Wasatch Front in 2005 over the previous year, while days on the market and inventories plummeted, according to a report released Friday by the Salt Lake Board of Realtors.

"It was an absolutely great year," said Sharon Spratley, board president. "Everything was moving in the right direction."

Home prices in counties along the Wasatch Front rose as much as 12.4 percent, according to the board.

Utah's home-price appreciation, the worst nationwide just two years ago, now ranks 22nd in the country, with an 11.4 percent increase in housing values in the year that ended Sept. 30, according to the Office of Federal Housing Enterprise Oversight. Utah's increase is less than 1 percentage point below the national average.

Not everyone benefits from rising home prices, of course. Strong appreciation undoubtedly will make it difficult for a number of low- to moderate-income families who aren't in the market now to buy homes in coming years.

But for others, rising home prices can provide a big financial boost.

Nate and Lindsey Clements, for example, cashed in on one of the hottest real estate markets in the country last year when they sold their home in St. George less than a day after they put it on the market. They then purchased a new home in another hot real estate market - Utah County. In just less than a year, the couple figure their Springville home is worth $20,000 more than they paid for it.

"We feel pretty good about the real estate market right now," Nate Clements said.

The good news for home owners is that a variety of factors probably will push prices even higher for at least the next several years. Utah's job growth is among the highest in the country, and the state continues to attract an inflow of people from other states.

Salt Lake City economist Jeff Thredgold, a Zions Bank consultant, said he wouldn't be surprised to see Utah's home-price appreciation remain in the top 15 among all states in coming years. While housing prices nationally may increase only 3 percent to 5 percent this year, he said Utah prices might jump 9 percent to 12 percent.

Prices are rising even in some of the state's least-populated areas.

Real estate agent Craig Sturm of Keller Williams Utah Realtors in Midvale, said sales are picking up in some Sanpete County communities.

He is looking for a large parcel - as much as 70 acres - in Mount Pleasant to develop into a vacation-home community.

With prices on the rise in communities throughout Utah, some are worried about a home-price "bubble" forming - and bursting - resulting in a sharp price drop.

But most experts say the chances of that happening in the next couple of years are slim because Utah's appreciation for much of the past several years has been below the national average.

Although bubbles are certainly a risk in many states, "we don't consider Utah to be one of them," said Ken Simonson, chief economist for the Associated General Contractors of America.

Buyers might not have to worry about a bubble right away, but do they have to worry about rising interest rates? The answer, say many experts, is no.

This week, rates on 30-year mortgages fell to their lowest level in three months after declining for six consecutive weeks, mortgage giant Freddie Mac reported.

Rates on a 30-year, fixed-rate loan dropped from an average of 6.15 percent last week to 6.10 percent this week, while rates for 15-year, fixed-rate loans dropped from 5.71 percent to 5.67 percent.

The good news is that the cost of financing a home could stay about the same for two years or even three, said Cliff Brewis, a senior director with McGraw-Hill Construction, which tracks the industry nationwide.

"We have all been anticipating higher mortgage rates, but I don't think they could become a problem for quite a while," he said.

County by county

Each county along the Wasatch Front had home-price appreciation in 2005, compared with 2004.

Salt Lake County: $185,500, up 12.4 percent

Davis County: $171,900, up 9.8 percent

Tooele County: $135,800, up 9.5 percent

Utah County: $175,000, up 9.4 percent

Weber County: $130,000, up 6.4 percent