Is it possible to create or has anyone created a saved search to show when the average cost of an item changes within 5% up or down? Thanks,

It's possible you could get really creative with system notes and formula fields to calculate the change and report on it. However, the easiest approach would likely be to use a workflow or script to capture the percent change (or old vs new), store it on a field on the item, and then it would be easy to report on.