BOULDER - Rental rates for office and retail space in downtown Boulder are expected to continue to rise while rents in the rest of the area remain stable, according to a forecast presented Thursday at the Boulder Valley Real Estate Conference and Forecast.

The forecast was given by Lynda Gibbons, president of Gibbons-White Inc.

Downtown Boulder rates have moved upward as firms try to find nicer office space, Gibbons said. Elsewhere, tenants have been on the move looking for better deals.

Gibbons predicted 2012 will see progress in two areas that have been long-term problem areas for the city. Development on a major apartment and mixed-use project at Boulder Junction should move forward. Meanwhile, a partnership of University Hill area residents and businesses and the city government holds promise for sprucing up The Hill.

"I think it's really going to gain some steam," Gibbons said.

Diagonal Plaza likely will remain in its present state, partly because the plaza is split between so many different owners.

"It's very unlikely a developer is going to be able to make sense of that project without very significant help from the city," Gibbons said.

Home prices in the city of Boulder remain level, while communities in east Boulder County have seen some fall in prices, said D.B. Wilson, managing broker and Realtor at Re/Max of Boulder.

Some good news is that more homes are being sold as the year continues, and the number of sales in 2011 has caught up with sales in 2010. That's encouraging in part because the 2010 market was so distorted by the first-time home buyers credit.

"There was so much pushed into the first half of last year, it's been a game of catch up all year," Wilson said.

The daylong conference was presented by the Boulder County Business Report.