Today, two specific types of condo properties are showing strong sales. Both in the city and suburbs, projects that appeal to “price-point” buyers–entry-level buyers and first-time investors, looking for condos at $200 per square foot or less–are in strong demand. Meanwhile, in downtown Chicago, developments offering views of Millennium Park and Grant Park are significantly outperforming their competition.

Suburban condominium conversions exploded in 2006, with more than 4,000 suburban units converted from rental apartments to condos (compared with the one downtown Chicago high-rise that went condo). The most typical suburban units for sale are one- and two-bedroom condos priced between $125K and $175K, with two-bedrooms showing stronger demand. Even including the renovation packages developers now offer, these conversions are much more affordable than new construction in the suburbs.

In downtown Chicago, Millennium Park is a powerful magnet for buyers, and developments with East Randolph Street and South Michigan Avenue frontage are proving easy to sell. Views of Millennium and Grant Parks are popular and highly marketable.

Magellan’s Aqua development, a block north of Millennium Park, is a combination hotel/rental/condo project with condos occupying the upper floors. The panoramic views, combined with a hotel and its amenities on-site, have proven very attractive to buyers–nearly 70% of the units are under contract.

The Legacy at Millennium Park, offering sweeping views of the park as well as hotel-style amenities via its connection to the University Club, is also recording brisk sales ( 70% under contract). And the mixed-use office/residential project at 55 E. Monroe (”The Park Monroe”) is reportedly selling well in its early stages of development.

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The National Association of Realtors (NAR) predicted on Monday, December 11, that sales of existing homes and condos would continue to fall in 2007.

Existing home sales will likely decline as much as 17.7 percent this year, and an additional 9.4 percent next year, according to the NAR.

However, the Association’s chief economist, David Lereah, is also forecasting a late-year recovery in 2007 home sales. He says that roughly 75% of the country will see a slow expansion of existing home sales by the end of next year, when compared with the fourth quarter of 2006.

Lereah added that “general gains in [home] value next year will be modest by historic standards.”

From July to September of this year, the rate of home price appreciation stood at 3.5 percent–a dramatic drop from the 12 percent rate the nation saw in the fourth quarter of 2005.

Lereah also predicted that 30-year mortgage rates would be up to 6.7 percent by September of 2007. Those rates were at 6.11 percent last week, according to mortgage finance company Freddie Mac.

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