This morning’s Denver Post reports that house prices in metro Denver rose less than 5 percent last year, compared to a national average of 9.36 percent and far below such hotspots as San Diego and Las Vegas. With typical real estate broker optimism, the Post suggests that our flat housing prices will help economic growth, as the metro area will look more affordable for businesses thinking about relocation.

Somewhat less optimistic is this report, showing that 2004 was a record year for bankruptcy filings in Colorado, and that only the grim year of 1988 was worse for real estate foreclosures in the metro area.

It may very well be, as the Post suggests, that the hottest real estate markets will experience actual drops in housing values in 2005 as ever-increasing interest rates put an end to the real estate boom that has been going on for ten years or more. But if that happens, the flat market we saw here in 2004 likely will look more like the beginning of a general real estate market bust than a catalyst for a quick rebound at the expense of those hotter markets.