MIAMI—Miami's Downtown Development Authority recently reported that the number of new Downtown Miami condos will surge by nearly 3,500 to be delivered this year as resale pricing falls, showing a significant slowdown in the market. The report describes the phase in the cycle as a sign of stability after an economic bust and then a boom.

One clear way to get a sense of the direction the market is headed is exploring whether banks—particularly those with success directly tied to and contingent upon the Miami market—are lending to new projects. In other words, what are community banks doing.

While other community banks in South Florida are pulling back drastically on commercial real estate lending overall, FirstBank Florida, a boutique bank with regional headquarters in Miami, continues to take a bullish, yet cautious, approach. According to Mahesh Pattabhiraman, senior vice president and Commercial Banking Head with FirstBank Florida, the cyclical nature of the luxury high-rise residential condo market has directed the bank's focus primarily to non-vertical projects that allow it to better manage risk.