What’s with Salt Lake City Real Estate?

In messing with residential real estate data tonight, I found that there were only two cities in the U.S. that were not in a bubble in 2005, but were bubbling by 2009. Recall, I’m defining a bubble as being when the ratio of house price to income in a city is more than two standard deviations outside the long-run average.

And what cities are those two bubble-latecomers? Spokane, Washington, and Salt Lake City, Utah. I can explain away Spokane by its high standard deviation, but Salt Lake City is more of a puzzle. The data sure makes it look like the sober citizens of Salt Lake demurred on the whole bubble thing until about 2006, and then went all-in, with the ratio peaking in 2009 at 4.8 (up from its average of 2.6).