ZOM Development in Orlando is right at home under the Big Top. Since its start in 1977, ZOM has built approximately 15,000 apartments, along with office, residential, condominium, and retail spaces. Yet, ZOM has stopped building condos in the frenzied Miami market, the same city where it has constructed numerous apartments and The Hotel Victor.

Why not build in Miami at the moment? It's simple. ZOM President and CEO Steve Patterson doesn't trust the financial strength and commitment of the foreign investors in South Florida. "I've always been a little leery of Miami," Patterson says. "There's a lot of buyer activity that doesn't show up in local demographics and in job growth numbers because of people from other countries. You're relying on Third World economies."

Patterson isn't the only person alarmed by the number of investors–both foreign and domestic–in the condo market. Making this even worse is that many of these investors are just speculators looking to sell their unit for a quick buck. As any apartment executive can tell you, job growth and wage increases haven't climbed enough to explain the dramatic rise in condo prices in many parts of the country. (For more detail, please see "Topsy-Turvy" in Multifamily Executive, August 2005, page 49.) End users stretching their buying power with exotic mortgages and people moving to condo-saturated urban areas certainly figure in the boom, but it's the increasing presence of speculators that make developers like Patterson wary to spend exorbitant amounts of money on land to build.

In some areas of Florida, investors constitute 50 percent or more of the buying, according Raymond James & Associates, a St. Petersburg, Fla.-based investment firm. Even in a more stable market, such as Washington, investors constitute about 30 percent of condo buyers, says Delta Associates, an Alexandria, Va.-based research firm. Most everyone agrees that some of these investors will eventually leave the three-ring circus that the condo market has become, but no one really knows when. All the people in the multifamily crowd can do is keep a protective hand on their popcorn and watch carefully for the signs–an uptick in interest rates, a hot stock opportunity, or even a revitalized dollar–that will cause investors to pack up their sideshow and move onto the next investment attraction.