According to a recent report by the Nelson A. Rockefeller Institute of Governments, "capital gains are about 74% more important to Colorado's state finances than they are to the average state. Moreover, both a burgeoning high-tech sector and a booming stock market have led to strong gains in Denver's real estate values. The rapid appreciation of home prices in the Denver MSA is a cause of concern, as the gap widens between median housing prices and median household incomes. The FDIC report's conclusion: "In the even tof a high-tech or stock-market induced recession, the Denver economy would have to contend with a negative wealth effect that is likely to affect this MSA more than other metropolitan areas."

Brad Neiman, who heads investment for Denver-based Mile High Properties, says he's not buying the report's conclusions. "The US has become a service economy as opposed to an industrial and manufacturing economy," Neiman told GlobeSt.com. "The FDIC seems to have the concept that Denver would be more adversely hit because we are not a manufacturing hub."Neiman also says he believes the Denver-area economy is diversified, with everything from high-tech to tourism fueling the economy.

Also, Neiman contends Denver's high-tech business is really being driven by telecommunications giants such as Level 3 and Qwest Communications, which are global players, rather than under-funded consumer dot.coms, which are most vulnerable to collapsing.

"I was just talking to the head of a large real estate investment company this morning, and he says there is no lack of interest in investing in Denver by institutional financiers," Neiman says. He said the national interest in Denver properties is much higher than in cities such as Dallas and Atlanta.