You are right in feeling that most of them are way overpriced. (But I don't think this is restricted to just Raleigh...I've seen downtown condos in Durham, Chapel Hill, Charlotte, and Winston also priced higher than I thought they should be.)
I've never lived in any, and if I ever do it'd be as a rental probably...unless the prices go down significantly. (And many of them are even overpriced as rentals, too.)
I don't really know anyone who's lived in a downtown condo, but single houses and apartments downtown, I do know, and they love the convenience and walkability. I currently live in a house just off the edge of downtown and even I wish I could get back closer to the core...
I myself did live in an apartment downtown for some time, and personally I strongly feel that there is a definite market for more of those. But of course, developers don't make as much money on them so there you go.
The funny thing is, the group of people who are most likely to want to live downtown in a non-singlefamilyhouse (condo, townhouse, apt, whatever) are younger professionals...often single...who obviously aren't going to make a salary to pay for a $300,000+ condo. (And the biggest employer downtown, state government, DEFINITELY doesn't pay enough for that.)
But if they were to build and offer more decent, nice upscale apartments (say, a modern 2 bedroom for 700-900/month) then heck yeah, there would be HIGH demand. OR if they offered less "luxury condos" and instead focused on moderately-priced simple condos in the mid-100s or so, those too would be in high demand.
But few of either of those have gone up and not many planned.