UBS AG is out of the Miami market, confirmed spokesman Peter Casey. So is GE Commercial Finance. Philadelphia-based private real estate investment firm AMC Delancey is still interested in Florida. Just not, for the time being, South Florida.

"We are seeing lenders overall pulling the plug," said Dan Kodsi, president of Royal Palm Communities, a developer in Boca Raton.

It's not only lenders on the construction end who are newly nervous about risk. The federal government hopes to damp the sale of exotic home mortgages which enable even credit-poor prospective homeowners to buy. So, even if condo developers get financing, condo buyers may not.

That's downright starry-eyed compared to the dark prediction served up by Fitch Ratings Service, the New York credit ratings company. Fitch projects that one out of every 10 condo conversion deals nationally inked last year will fall flat.

Jack McCabe hasn't stuck a figure on it, but the Deerfield Beach-based real estate prognosticator and president of McCabe Research and Consulting is talking of creating a vulture fund poised to swoop in on distressed properties and pick them up for a song.

You don't have to be a real estate whiz to spot the early warning signs that condo financing is being hamstrung by everything from the high price of construction to skittishness over rising interest rates.

Real estate agent Darlene Delano said when she recently took a client to view a North Flagler condo, it was empty.

Even "pre-sold" buildings are struggling. That's because would-be owners who put down deposits thinking they would secure a 2.5 percent interest rate mortgage are now facing rates of 5.5 percent and higher — just as the condo is ready for occupancy, and they have to sign mortgage papers.

Builders blindsided by rising materials costs can lose a lot more than that.

That appeared to be the case at Promenade Condominiums in Boynton Beach, where reservation money was returned to buyers last month after the developer cited "meteoric rises in construction costs." One of those buyers has since sued, in part because the condos were put back on the market for sale — in his case, for an extra $70,000.

At Opera Place, BAP of Miami's high-profile high-rise in downtown West Palm Beach, the rising cost of materials prices forced the developer to assess a "construction surcharge" to those converting reservations to contracts. Miami developer BBB Group didn't even get that far. Citing a lack of financing — and construction costs that made generous financing necessary — BBB called it quits last week, walking away from its planned 49-story, 364-unit Brickell Bay condo.

To be sure, most major finance firms and banks can withstand taking a hit if sales at their projects slump. Speculative investors hoping to make a quick buck reselling are another story. The going figure is that half of all South Florida condo purchases within the past one to two years have been made by investors. McCabe is among those who thinks the number of such investors is closer to 70 percent.

What no one disputes is that many of those investors are real estate novices.

Further, "People are not going to be able to rent these out at anywhere near the amount needed to cover" their costs, McCabe said. That's because many of the new units were designed to appeal to the luxury market, and a lease big enough to cover seven-figure mortgages is out of reach for many renters.

Balin agreed. "The numbers don't work as a rental," he said.

As a result, speculators who can't quickly resell are likely to wind up renting their units at a loss.

Down market cycles are nothing new to South Florida, of course.

"I would counsel people not to think that the sky is falling," said Metrostudy's Hunter.

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