From The Rocky Mountain News:

Denver area sees 20% drop in unsold-home inventory

Is the Denver Housing Market "Fixed?" No. Is it improving? Yes.

Every housing market rebound (or any market rebound) starts with a decrease in supply relative to demand. Seeing both bank owned and owner occupied home inventories decrease by 20% is a great sign that things are turning around.

Keep in mind that these statistics are for the metro area as a whole. Certain cities / neighborhoods in the metro area have remained strong throughout this "downturn."