"The condo market seems to be really hot at the moment," said Realtor Brian Kessler of Alain Pinel Realtors. "I had a condo/townhouse listing in Los Gatos last month and it sold in two weeks. Since you get more square footage and amenities for the dollar, a condo-townhouse is a great alternative for many people."

Kessler said the profile of every buyer he has encountered has been a divorced person coming out of a relationship and moving from a large home. For people with children who are looking to stay in a good school district, condos can be an affordable option.

Realtor Susan Fagin of Alain Pinel Realtors said one of her clients looked at several condos on one day and then wanted to revisit them a few days later. However, all three of the condos were already under contract. "The condo market under $400,000 is hot, with a very short time on the market and multiple offers," she said.

National Association of Realtors Chief Economist David Lereah said the pace of condo sales during the first half of the year has been unprecedented and will easily set an annual record for 2003. "In fact, this will be the eighth consecutive year in which condo and co-op sales set a record, with low interest rates stimulating all sectors of the market. Even with mortgage interest rates rising over the last few weeks, they remain very attractive and coincide with a strong underlying demand for housing," Lereah said.

Condo prices are continuing to experience strong appreciation and seem to be rising at double the rate of single-family homes, said Cathy Whatley, the association's president.

"For the last few years, condo prices have been rising faster than single-family homes," Whatley said. "While some of the rise results from a higher number of more luxurious units in the sales mix, demand alone is accounting for much of the price increase."

Condos and townhouses that are priced right are selling quickly, said Realtor Nancy Goldcamp with Coldwell Banker in Palo Alto.

"I am finding single people are purchasing condos and townhouses, as well as young couples and retirees. Some people find a secure building appealing, with either a locked or gated parking area and locked entrances to the units behind a gate or locked door that requires being buzzed in or having a key," said Goldcamp. She recently sold two townhomes to single women.

Realtor Lisa Giuffre of Alain Pinel Realtors in Los Gatos believes condos can sometimes be a better investment as a rental rather than a single-family home, because landlords do not have to worry about maintaining any part of the exterior.

"When you have a single-family home as a rental, replacing a roof or fence can be very expensive. With a condo, the homeowner association covers these types of expenses. If you can find a condo with low association dues, it not only saves you the hassle of having to make sure repairs are done, but it could probably save you money in the long run," Giuffre said.

It's a good idea to look at the maintenance of the complex and check out the dues structure before buying a condo or townhome, suggested Realtor Jackie Cockreham of Re/Max Today. Are the dues artificially low and the complex is suffering for it? Or are they very high because of deferred maintenance?

"I counsel my buyers that with condos/townhomes, location, light, degree of privacy and overall condition are extremely important. In a slower market when there may be lots of homes on the market within your own complex, the better-placed homes like the top floor, end unit are the ones that will sell first," Cockreham said.

"My buyers right now are young professionals, married and single, who don't like what they can get in a single-family home in their price range," Cockreham said. "It's sort of like apples and oranges—you get a new home with more square footage or an older fixer-upper with your own piece of land."

Cockreham said buyers who don't have the time or the resources to do the updating may opt for a townhome style with a larger patio or small yard attached.

"Seniors are also looking at this style of living, but I find a lot of resistance to moving out of their family home, and it's also difficult finding acceptable condos that don't have a lot of stairs," Cockreham said. "Younger families are moving into townhomes because they can't afford a single-family home in an area with a good school district."