Industry experts have mixed feelings about whether the boom is beginning to ease. The East and West coasts, parts of Nevada, Florida and the Northeast are recording strong sales where jobs and populations are growing. Other areas have seen the rate of appreciation slow, including parts of Colorado.

"I think that price appreciation will for the most part remain pretty solid for another three, four quarters," economist Celia Chen of Economy.com, said. "By the end of the next year into early 2007, we'll see substantial slowing in house prices."

In Colorado, the market mirrors the economy's boom-and-bust cycle. During the oil boom of the late 1970s, real estate did well but the market sank with the bust in the early 1980s. Prices built again during the 1990s when the economy flourished but Colorado fell into a recession when the high-tech industry bubble burst. The economy has started to recover but has not returned to the levels of 2001.

The Colorado housing market should not become as troubled as it was during the oil-bust era because interest rates are much lower and residential values are appreciating, said Byron Koste, director of the University of Colorado Real Estate Center.

The median home price in metropolitan Denver was $248,400 in the second quarter, up 3.8 percent from 2004 and 9 percent in the past three years, according to the National Association of Realtors.

About 53 percent of Colorado households cannot afford to buy one of the state's median-priced homes -- a rate second only to Hawaii's high-priced housing market, according to a recent FDIC study. In addition, 53 percent of mortgages issued in Colorado in the second quarter were ARMs, second only to California.

"Housing prices, although they haven't moved up rapidly, they still remain relatively high and I think that is an explanation of why we've seen such a significant use of those innovative mortgage products," said Alan Bush, an FDIC regional manager who tracks the Colorado economy.

"There could be some challenges for a portion of those folks that have adjustable rate mortgages as they re-price in a higher interest rate environment," he said.

Patti Rawson, a partner-broker at South Park Mortgage in Larkspur, gets plenty of business from people looking to refinance ARMs. Some bought big homes and were hoping for a jump in appreciation but have been disappointed with the market.

She recommends people educate themselves and read the fine print on contracts, emphasizing that there is no state regulation on mortgage brokers. "We just tell people if it sounds too good to be true, it is," she said.

Zachary Urban, who manages a housing counseling program for nonprofit Brothers Redevelopment, blames rising foreclosures in metropolitan Denver in part on homeowners who don't understand their loan terms. The number of people he has counseled has risen from 49 last year to 270 so far this year.

"It seems like anybody can get a loan these days, which is great in the sense of creating home ownership opportunities," he said. "There needs to be an education outreach."

On a recent Saturday morning, Enie and Tony Brooks joined a small group at a foreclosure prevention workshop led by Urban, hoping to hear a way to save their home of 17 years.

The couple obtained an ARM for $146,000 in 2003 and the rate has climbed from 7 percent to 9.5 percent -- and could increase up to 11 percent. Today, their payment is about $1,200 a month.

"It's already astronomical what we have to pay," Enie Brooks said. "We're not in foreclosure but, you know, paycheck-to-paycheck living. Things are getting rough."

Enie Brooks, who works in office administration, said the couple is struggling to recover after her husband was out of work. "Right now we're not in a position really to be able to refinance," she said.

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