CoreLogic forecasted last week that they believe home prices will drop nationally by 6.6% in the next year as they believe "buying will slacken at the end of summer and we expect home prices will show declines in metro areas that have been especially hard hit by the recession."
I can definitely see home prices dropping in cities that rely heavily on tourism and hospitality such as Las Vegas, Phoenix, and many cities in Florida. I absolutely don't see Denver home prices dropping in the next year. Why? Typically for home prices to drop you need lots of distressed sales and metro Denver's mortgage delinquency rate has been miniscule and homeowners typically have at least 20% or more equity in their home.
Next, the unemployment crisis has hit renters much harder than homeowners as there are very few homeowners who work in the service sector unless they are in management.