National Condo Inventory Rises Sharply

The condo market is showing signs of cooling as the inventory rises sharply, analysts see a flood of supply in pipeline...

MSNBC.com reports that there are early signs that the nation's condo market is beginning to lose its punch. Inventory of condos rose in July to 5.3 months supply, up sharply from 4.1 months supply in June.

The condo market is watched closely as a potential canary in the coal mine of a housing market reaching dangerously overheated levels in the view of some analysts. Condos are vulnerable to any pull-back in part because they traditionally attract strong interest from investors, with 30 percent or more of all units made available as rentals.

Last year builders started construction on 120,000 multi-family housing units intended for sale as condos, up from 87,000 in 2003. In the first half this year the figure was 65,000, up nearly 40 percent from last years pace. More...

With the growing number of condo units being built and planned in the Metro Phoenix area, could this softness show up here also?