Eugenia Levenson of Fortune magazine recently identified five key markets for buyers in the volatile condominium market. The article is part of Fortune’s 2007 retirement guide, so the recommendations are more targeted to residents than speculators.

#1: Miami
Miami’s overbuild is now legendary. Though buying dropped off starting in 2005, the development train kept on rolling: this year’s 8,000+ new units will be eclipsed by next year’s 12,000+. Discounts and days-on-market are ballooning, so great deals can be found.

#2: Naples
Naples got a bit overheated in pricing until last year, though development activity has been kept somewhat in check. Levenson points out that while Miami may still see further settling, Naples is probably better timed for buyers.

#3: Las Vegas Vegas’ approach to condo development has been all talk, little action. Though many projects are announced, Levenson points out that only a small fraction actually break ground. You’d expect no less from a town that lives and dies on its bets. Experts expect prices to maintain at current levels, with a possible downshift in a few years when early buyers start to sell.

#4: San Diego
San Diego prices skyrocketed in the last few years, peaking in 2005. Since then it’s been down and flat. Some expect further decreases, especially with added inventory in the next two years. According to Levenson, sellers are resorting to waiving closing costs and homeowners’ association fees.

#5: Phoenix
Phoenix recently added luxury urban high-rises to its traditional mix of low-slung residential communities. Prices slid after 2005, with home sales cut nearly in half. More units are expected next year, so a well-timed buyer could benefit from the misplaced earlier zeal of over-leveraged developers.

For more detail, along with key statistics, check out Levenson’s complete article on Fortune’s website.

Helium Report’s Take
Buying a condo represents different things to different buyers: long-term investors, short-term investors (flippers), vacationers, working residents and retired residents. For each category of buyers, there’s a due diligence process to identify the best purchase. For flippers, timing is everything. For residents, floorplan and location are paramount. Vacationers prefer a full complement of guest amenities and proximity to air transportation and local attractions.

Identifying your category will help you make a better decision and evaluate possible alternatives. For non-investment property, take a look at Helium Report’s coverage of vacation alternatives: destination clubs, private residents clubs and condo hotels.