If you read the papers and watch the news, the condo market in Orlando and Central Florida lost its luster sometime in '06, although, with the benefit of hindsight, we can now see the market was already cooling in the last half of '05. As a good economist will tell us, any market that gets over heated (ours was) will see a reciprical drop in values (ours has) and will eventually reach a new equilibrium where supply and demand get back into balance (and ours will.)

Our condo market peaked and is now trying to find that happy place between supply and demand. There's an interesting game of "perception management" going on right now with many of the Downtown Orlando condo projects. On one extreme are the developers who are willing to call a spade a spade and confess that their numbers just don't work anymore, and that they are pulling the plug on their project. On the other extreme are developers who claim that their project is moving forward because they have such a unique product and this will allow them to buck the current market trends (riiiiiight). And as is life, in between these extremes lies the majority of projects, currently hanging in the balance, with developers who are re-evaluating their pro-formas and trying to come up with smart solutions or no-so-smart buyers for projects that no longer work in our new market.

This article gives an interesting survey of the above. Its not particularly encouraging to anyone trying to sell a condo right now, but if there is a silver lining in all this, it is that we're not experiencing the bloodletting that's currently going on in South Florida. And there are quite a few deals to be had out there for buyers right now. Of course, if some of these currently planned projects trudge forward and increase our already over-built inventory, even better deals may be had by buyers who sit tight. Personally I would not be rushing out to buy a condo right now. That said, I also have a rather savvy investor client who is picking up outstanding deals in short-term vacation condos right now, all of which are cash-flowing very nicely. So hard to say.