John Rebchook from Inside Real Estate News spoke with Lane Hornung, president of COhomefinder.com and 8z Real Estate for a recent article. His article was announcing that Denver ranked fifth on the Case-Shiller index comparing twenty different real estate markets, the highest it has ranked in a couple years. Despite its comparative gain, Denver was still down year over year.

So now all the talk is, will housing values double dip?

Lane Hornung, said to Rebchook that he was “happy to see that the Denver metro area once again avoided the dreaded double dip,” according to the Case-Shiller report. “But we are perilously close. We are 0.87 percent above our post-peak low, reached in February 2009. Another way to put it: We have been bouncing along the bottom since February 2009.”

Case-Shiller has been tracking an “ongoing, gradual erosion,” in Denver-area home prices throughout the winter, he notes.

Low inventory bodes well for prices rising

“I believe the trend will be reversed sometime this spring,” Hornung said. “I”m not sure it will happen in time to avoid the double dip, but I think the shrinking inventory bodes well for prices and for that trend of price erosion to reverse itself.”

Hornung noted that the inventory has not matched the typical seasonal rise in home demand in the spring. While the Denver-area market, as expected, was down in March from March 2010 because of the loss of the tax-credit buying, it was up 44 percent from February, he notes.

“Sales volume is up 44 percent and the number of listings is up only 2 percent,” Hornung said. “Demand still may be weak, but the supply is even weaker.”

Still, the Denver-area housing market is so close to a double dip, it may happen, but it will be a mere blip.

“Whether it happens or not, by the time we know it has happened, we already will be reversing the trend,” Hornung said. “It would be a psychological data point, for sure. But when we smooth the data out over time, a one- or two-month blip will not matter.”