Developer Wood Partners' new Uptown building isn't finished yet but has already seen major changes.

The 22-story Glass House residential high-rise on McKinnon Street was planned as a condominium tower.

But the builder recently decided to switch to rental after several months of marketing the units to potential buyers.

"We stuck our toe in the water to see what the condo market was like and got a good response," said C. Todd McCulloch, Wood Partners' Dallas development associate. "But with 375 units, you are not going to get a response like you need in the current market."

That's because condo sales have been the hardest hit sector of the local real estate market.

While sales of single-family homes have fallen by 15 percent so far this year, sales of condos and townhouses are down by almost a quarter.

And the months' supply of condos and townhouses on the market in North Texas has jumped by more than 35 percent since early 2006.

While Dallas doesn't have nearly the surplus of condos and townhouses found in markets in California and Florida, there are oversupplies in some neighborhoods and product types.

"A lot of the townhome market was selling with subprime mortgages and that's gone, so that's why it's slow," said Dallas housing analyst Mike Puls. "And a large segment of the luxury condo market – 25 percent or so – was selling to investors."

Most investors have pulled out, and many didn't close on units they had contracted to purchase. "They tied up some of the better units, and then didn't close the sales," Mr. Puls said.

No wonder then that some condo developers are rethinking plans and – in some cases – shifting gears.

Several buildings have been canceled. And other projects – such as the Glass House – could wind up as rentals, which are in greater demand.

In some neighborhoods, townhouse projects were scrapped after construction began, leaving vacant foundations and even some unfinished buildings.

A few buildings that began sales as condominiums have put their unsold units on the market in bulk.

There is still plenty for buyers to pick from.

In Uptown alone, more than 200 units are available in high-rise buildings under construction.

Throughout North Texas, more than 4,000 condos and townhouses are listed for sale through the Realtors' multiple listing services.

With the market facing an oversupply, developer Harvest Partners has killed plans for two condo towers in its huge Park Lane development.

The project under construction across U.S. Highway 75 from NorthPark Center already includes two high-rise apartment buildings.

The condos originally were to sit atop a boutique hotel.

"We took the condo portion off," said Harvest Partners' Tod Ruble. "Three or four years ago, you couldn't finance a hotel without condos.

"Now you can't finance one that has them."

Indeed, Victory developer Hillwood has indefinitely delayed work on the tallest building planned for its project on the edge of downtown Dallas. The 43-story building was to have contained luxury condos, a Mandarin Oriental Hotel, office space and retail.

For buyers looking at condos, the timing might be right. Sale prices have fallen by about 10 percent since last year, according to MLS data.

"People who come to us, for the most part, are looking to negotiate," said Don Davis with Ebby Halliday Realtors. "And in many instances, they are getting good buys."

And with the average time it takes to sell a unit at more than three months, it's definitely a buyers' market.

Condo building owners who have tried to sell their units in bulk to investors have yet to see much success.

Earlier this year, the developers of the historic Lake Cliff Tower condo in north Oak Cliff offered the more than 30 unsold units remaining in the building in a package.

Real estate broker Will Balthrope with Marcus & Millichap marketed the building and said the developers decided not to go ahead with the bulk sale.

Despite multiple offers, "we did not find a buyer willing to pay a price the seller needed," Mr. Balthrope said.

"The condo market is not robust now."

Tougher financing standards that have swept the mortgage markets have also placed a heavier burden on individual condo and townhouses buyers, Mr. Puls said.

"The people that are in the urban core are living more of the fast lane life, not necessarily saving and often don't have pristine credit," he said. "The financial markets are now demanding that."