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Dallas condo boom seems to be flourishing. With construction costs sky-rocketing and investors pulling out of the housing market, many residential tower deals have been killed and others are in doubt. "Construction costs have risen a lot faster than sales prices of condominiums," said Jonas Woods, president of Victory developer Hillwood Capital. "That's why you are seeing some of these projects get canceled." Developers of the 16-story Maple Terrace condominium project some time ago had shut down sales, which had not hit targets. "In the last 45 days it really started to get some momentum, but sales at the kickoff were a bit disappointing," said Art Lomenick, managing director of developer High Street Residential. "A lot of folks are stepping back and looking at their options because of what is going on in the market." What is actually happening is that investors of which many are from out of the state, are boycotting the housing market. Economists and builders credit the investor pullback with causing the majority of the nationwide downturn in home sales this year.

The decreases have been worse in markets such as California, Florida and Las Vegas, where dozens of condominium deals have been canceled because of slumping demand. Investors have accounted (by some estimates) for more than a third of Dallas condos pre-sales. Already, there are numerous high-rise Dallas condos under development, and a couple more will start in the near future. Seven towers built uptown and downtown will have almost 1,000 units. Six buildings in pre-sales will add 600 more Dallas condos two of which are set to start next month. The 28-story House by Philippe Starck is situated in the Victory complex and will have 150 Dallas condos, most of which have been sold, says the developers. "Our loan closing is imminent, and that's the only thing we are waiting for," Mr. Woods said. Prescott Realty Group had plans to also to break ground on its 21-story Stoneleigh Hotel and Residences project on Maple Avenue. "We are finishing construction documents and will break ground at the end of August," said Prescott president Jud Pankey. However, other developers were reconsidering their deals.

Mockingbird Properties had stopped marketing its 20-story Galleria North condominium tower in Far North Dallas and was negotiating with a hotel operator, said developer Mitchell Vexler. "We were approached by a hotel group from Europe that has been trying to do a deal here," Mr. Vexler said. "We had pretty good traffic with our condo sales, but we weren't lighting the world on fire. The market is starting to cool a little bit." If the hotel company decides to build on the Noel Road site, the project would have about 78 Dallas condos which is far less than the 126 units initially planned. Another Far North Dallas condo tower, the 80-unit Amalfi project on Montfort Road, is at a defining moment, said builder Mickey Munir. The developers are negotiating with a new financial partner that would start the building without having more pre-sales. "Selling something coming out of the ground is easier than selling something that might be coming out of the ground," Mr. Munir said. "If this works out, we will start it."