The condo market still hasn't recovered. At least, that's the word from the National Association of Home Builders' Multifamily Condo Market Index (MCMI), a metric that gauges builder sentiment about the for-sale multifamily market.

MCMI's value of 15.2 for current market conditions in the first quarter of 2008 is roughly half the 29.6 value from a year earlier. The MCMI is derived from a quarterly survey of multifamily builders and developers. The value is rated on a scale of 0 to 100 where a rating of 50 generally means that the number of positive responses is about the same as the number of negative responses.

Still, builders are more optimistic about the six-month forecast for the market—though not as optimistic as they were a year ago. According to the MCMI, that metric's value of 29.7 is down from a value of 32.9 during the same time last year.

“There's no question there's still a huge inventory of condos sitting out there,” says Gopal Ahluwalia, staff vice president for survey research at NAHB. And indeed, that inventory seems to have builders feeling skeptical about the market's future.

Compared to the fourth quarter of 2007, most builders also said it was more difficult to get credit. About 19 percent described the lending situation as “about the same,” but another 81 percent described it as “worse” than the previous quarter.

But there is one silver lining in the report. The MCMI value for traffic of prospective buyers is at its highest point since early 2006, when the survey began asking that question.

But Ahluwalia thinks consumers will need to have confidence that prices have hit rock-bottom—and that they can secure loans—before they start buying condos. “Traffic has increased considerably, but I think it's the consumer perception that prices will drop further,” he says.