According to data released by Metrolist, residential sales in August 2012 rose a staggering 18 percent over the same period in 2011. Sale prices also rose a full 10 percent higher in August 2012 over August 2011.

It is a continuation of several months of improving numbers.

"The Denver market was the first market to go into the recession. We were the first one to feel the impact of the foreclosures and now we're the first ones to come out of it," said Gary Bauer, an independent broker and director with Metrolist.

The inventory of residential properties on the market has shrunk considerably in the last year. In August of 2011, there were 16,631 homes for sale. And in August 2012, that number is down to 10,826. Properties averaged 99 days on the market in 2011 and are now selling in only 64 days.

"For a long time now many economists have said that we really won't be into a recovery until we see the housing market recover, and so numbers like this suggest that we may be getting to that stage," said MacClouse, a professor of finance at the Daniels College of Business.

The diminished inventory of homes for sale is also having an impact on new home construction.

Brookfield Residential Properties has broken ground on the Midtown development, a 131 acre project near 64th Avenue and Pecos. Within weeks they will start building the first of what will eventually be 1,300 homes.

"You know we're pretty bullish," said Tom Morton, Senior Vice President of Brookfield Residential Properties. "We believe that the next 2 or 3 years we'll see those permits go up to 12,000 and consequently we're out looking for new positions and new properties. So we're pretty excited about where we're going,"

New home construction has a far reaching impact on the economy. It is felt far beyond the property the home is built on.

"Big, very, very big because it involves so many things: constructing the building, the materials industry and it involves the financial institutions," Clouse said. "So it has its outreach in so many areas of the economy that it is a very big sector."

New home construction also adds to job market.

"Well it is huge obviously," Morton said. "We employ a lot of people just from a straight construction standpoint. It is a big deal, the number of people that we employ and we're starting to see a shortage in that area already."