Ahh - that old chestnut again!
You may have see a report in the Tenerife Sun a couple of issues ago on the state of the building industry on the islands. Several thousand workers laid off because of lack of work, created, in the main, by Banks not being quite so generous with loans these past months for new (and some existing) projects.
Some of this is attributable to the problems in the USA credit market, but with a fair few apartments still up for grabs in the Balcon, and that other white thing (Gigansol) almost totally unsold, I think it will be most unlikely that anyone will put their hand in their pocket (or in the case of a Bank, somebody elses pocket) for some time - if ever, to fund the redevelopment.
With so much unsold property around in the area, and with so (relatively) few visitors these days, supply is so far ahead of demand I suspect it would be a gamble too far no matter how stunning the views are.