Rising with the help of cranes and soaring values, condominium towers are multiplying like subdivisions in the sky. Condo units in the city's core are expected to increase from about 450 now to nearly 1,000 within two years. By 2011, there could be more than 2,000.

The median price of these urban homes shot from $257,000 to $315,500 in 2006. That 23 percent increase is triple the appreciation rate of traditional single-family homes in Wake County.

The rise in condo numbers and prices -- also a phenomenon in other midsize cities -- can go too high. Overbuilding has taken the sizzle out of condo markets in Miami, Las Vegas and elsewhere.

"There's a lot of risk," said developer Gregg Sandreuter, who is building a new 170-unit condo complex called West near Glenwood Avenue. "Anybody who says it isn't is just not understanding reality."

So far, demand appears steady. Out-of-state investors are queuing up alongside empty nesters and young professionals to buy. But there are signs of caution. Some developers have shelved plans. Others have abandoned them.

"I felt it was a lot less risky than if I bought it 10 years ago," said Scott Scherer, a Los Angeles resident who recently paid more than $320,000 for a condo in the partially built Palladium Plaza.

"I wonder sometimes, 'Is this puppy going to appreciate at all, or is it going to be flat?' " he said. "Part of it depends on what happens in downtown development and the perception."

A life of convenience

Barbara Mooty watches downtown from the balcony of her condo on the 10th floor of the Paramount complex.

She paid close to $400,000 for the 1,188-square-foot unit, in part so she could be close to the bars and restaurants of Glenwood South below. "It's a lifestyle of convenience," said Mooty, 50, a jewelry industry executive.

Neighboring condos are going on the market at jacked-up prices. One is Andrew Greer's place, Paramount Unit 410. Greer and his mother bought it two years ago for $389,500. Now they are trying to sell it for $575,000. "It's just perfect," Greer said as he prepared the condo for a showing.

Greer, a 40-year-old insurance manager, pointed out the commissioned art, the heated towel rack in the master bathroom and the furniture he spent two years tracking down. "This is my S-Class Mercedes," he said. "I wanted my home to be nicer than a hotel suite."

Downtown's appeal

The boom comes as the lure of urban life expands in Raleigh.

People are selling suburban homes for condos half the size so they can be closer to restaurants and entertainment. Young professionals are selling their downtown bungalows to move into high-rise condos.

They gather in places such as the Borough, a bar and restaurant in the Dawson on Morgan complex.

"Even if you're not in the same building, when you say you're in a condo, there's a bond there," Michelle Felmy, 35, said as she sipped a cocktail. "You obviously share something because you're not going to ask, 'Why did you move into a condo?' "

Investors are trying to get in front of the trend. Highwoods Properties has said that a quarter of the reservations for the 139 RBC Plaza condos it is building have been made by people looking more for a profit more than a home.

"It's not just an edgy adventure into creativity, it's an edgy adventure that could make some financial sense, too," said Roland Gammon, who built some of downtown's condos in the 1990s.

As a result, the small-town residents and suburbanites who sat out when Gammon built the Cotton Mill condos on Capital Boulevard a decade ago are coming downtown in search of second homes. "I have two couples from New Bern who own one-bedrooms in downtown and come here on weekends," said real estate agent Ann-Cabell Baum Andersen.

Misgivings

Some property owners and downtown pioneers have benefitted as condo prices have risen. Mostly, the uptick reflects the surging expense of concrete, land and steel.

Some developers fear condos might soon become too expensive. A few new projects feature smaller condos with prices below last year's median. Most of the units at the Nash, a planned complex on Dawson Street, are to be smaller than 1,000 square feet; prices are expected to start below $300,000.

There have also been cutbacks. Empire Properties last month abandoned plans to wrap dozens of condos around a county parking garage after it had difficulty meeting open-space ordinances. The Boulevard Co. of Charlotte once talked about building condos at Hillsborough Street and Boylan Avenue. Now it says it might sell the $1.4 million site.

Sandreuter, the developer of The West, pushed for 200 units but now plans only 170. "You have to be able to sell them," he said. "You don't want to be short, but you don't want to build too much. It's like The Three Bears: 'Not too hot, not too cold, but just right.' "

Over the next few years, a surge of condos will fill the market. They will appeal to baby boomers, first-time home buyers and even the environmentally conscious.

Investors will have to be careful, said Bernard Helm, president of the real estate data firm Market Opportunity Research Enterprises. It's a tricky market with a limited appeal. "Developers who do their research and know who they're building for will do fine," he said. "For those who are building condos because they hear the market for condos is hot, there are going to be empty pockets."