Bubble? Q4 real-estate report: not likely in Colorado.

• Author: Titus, Stephen

BETWEEN NEW YEAR'S DAY AND SEPT. 19 THIS YEAR. 38,636 PEOPLE IN COLORADO sold their homes for an average of $250,830. Among them were Amanda Jervis, who sold her Englewood house without a real estate agent to an investor for about $225,000--10 percent more than she had paid for it three years earlier. She said she felt lucky to get out of the market before the real-estate bubble in Colorado burst. In Denver's Highlands neighborhood, however, James Langevin used a 100-percent mortgage to purchase a new home for $355,000 from a small, custom builder. Langevin, not seeing an over-inflated market, said he was looking forward to finishing the basement of the house and selling it to realize some healthy capital gains.

So what's going on in Colorado? Bubble? No bubble?

Some economists and a few residential builders worry that we are on shaky ground and real-estate investors may soon find themselves choking on the dust of overpriced projects. They even compare the current market with the stock crash of the 1920s.

At the same time, many more builders, bankers, investors and real-estate professionals are bullish on the future of Colorado's home market, and they say we are in a rare state of near real-estate nirvana: steady demand, a healthy economy and prices that are in line with the national median.

"We have a very, very nicely balanced market," said Daryl "Jes" Jesperson, CEO of ReMax International. "Right now we have what I call the Goldilocks market: Buyers can go out, look around and make a choice on a home rather than have to rush in a bid and maybe bid it up."

The accepted definition of a just-right market is a six-month supply of houses at the current rate of demand. As of August, the supply in metro Denver was nearly 4.8 months, which leaves some room for modest price increases. Jesperson added that more expensive homes, those priced at $800,000 and up, represented the softest sector in the residential market. Figures from the Denver Board of Realtors show a 12- to 18-month waiting period for sellers with product in this price range, while single-family homes priced below $250,000 enjoyed the hottest demand, selling in an average of 77 days.

"Over the past couple of years, we've had 3 percent to 5 percent appreciation per year," Jesperson said of the Colorado home market. "The froth is on the coasts, or edges of the country. What you're seeing now in those markets is growing inventories."

Take a look at prices in California, Florida...