MANCHESTER – Slowing home sales and rising interest rates may have some folks wondering whether New Hampshire's real-estate market is due for a sharp correction, but luxury condominium developers don't see deflation occurring anytime soon in their red-hot sector.

Developers say strong demand from cash-rich Baby Boomers has kept the luxury condo market strong and stable, as workers close to retirement age and empty-nesters look for hassle-free and gracious living.

"We've had one of the best first quarters in the history of our company," said developer John Stabile, chairman of The Stabile Cos. "This part of the business isn't bubbling. We're hitting a market."

Stabile said his firm sold more than $10 million worth of its luxury condo properties in the first quarter. At present, the company is building four new developments in the Granite State, and demand so far remains strong.

For instance, according to Stabile, it has sold 17 out of 25 units at its Reeds Farm development in Hollis. The detached condos, which are between 2,000 to 3,000 square feet, adjacent to a golf course, sell in the $600,000 to $700,000 range, Stabile said.

At the company's The Fells in Amherst development, prices for 13 detached condos in the project's second phase are starting around $380,000. Nearly all the 24 detached condos in the development's first phase have been sold, according to the company.

The buyers for these units are more than willing to pay such prices, and spend money for special renovations. Some buyers, according to Stabile, spend more on their kitchens than he spent to buy his first house.

"A very small percentage of the people we sell to today have mortgages. Most have sold their big boxes, and this is the investment of that money," Stabile said.

The strength in the luxury condo market comes as the traditional housing market has cooled. For example, it was reported last week that about 1.21 million new homes were sold this March, about 100,000 less than in the previous March. The median price for those homes also fell about 2.2 percent.

And while new home sales jumped 13.8 percent between February and March, that big gain was primarily due to surges in the West and Midwest. Here in the Northeast, sales were up just 4.7 percent month-over-month.

Developer Eric Chinburg, who is now building luxury townhouses along the Merrimack River in Manchester, has also seen some of his buyers pay cash. Others are using a combination of equity from their own homes, plus a little bit of debt, he said. So far, he said, 12 of the homes — which range from about $299,000 to the low $500,000s — have been sold. In all, 45 units are planned.

"We've had good sales of our townhouses — we're on track for what we hoped for," said Chinburg, who also plans to build two condo towers just south of MerchantsAuto.com Stadium. Those units will start in the mid-$200,000 range.

While the market certainly has its risks, Chinburg said, his group is trying to create a product that is unique, so that if a correction does occur, his development will be still be a go-to place.

But Chinburg sees the luxury condo market as stable, and said his own Manchester projects were going well.

"We seem to be attracting empty-nest type of buyers, and (those in their) early 50s with kids in college, and a few younger people who have sold a home," Chinburg said.

Other luxury condo developers outside of Manchester see similar buyers. Tami Pelletier, who with her husband Michael are developing the Collins Landing condominiums on and near Lake Horace in Weare, do see some younger buyers. However, most are older and have previously lived in large homes.

"It has that appeal for that semi-retired person," Tami Pelletier said. "They're not ready to leave the state. They kind of have one foot out — they're probably still working in Manchester, Nashua or Concord."

The Pelletiers have built 62 out of 92 planned units for the Collins Landing development. The waterfront units, which are among the last planned to be built, will likely sell for more than $300,000 each.

One added bonus for luxury condo buyers, according to Pelletier, is that high-end condos are more comparable to regular homes in terms of their market than lower-end condos. But it's not just developers who see the luxury condo market as stable.

"I think there's going to be a very steady sales pace. Prices are going to be very stable," said Ben Asselin, a Manchester-based vice president for Sovereign Bank who specializes in commercial real estate. "I think the new (luxury) construction is priced right. I think the entry price is pretty much set."

A lot of that has to do with the relatively low supply of luxury condos, according to Asselin. That helps keep prices up.

As for the condo market as a whole, Asselin said he thought it was starting to slow down. As one indicator of that, he pointed to the number of mid-market condos which were presently on the market. However, Asselin also said the condo developers in that market were very financially strong.

Business remains brisk for one such developer, Brady Sullivan Properties of Manchester, which has made a name for itself converting apartments into condominiums.

Arthur Sullivan, a principal in the firm, said the company had sold just over 1,000 units in 2005, besting a prediction he made last April. And in one of Brady Sullivan's most recent conversions, the Brickstone Mill condominium in Manchester, the firm sold 29 of the 32 condos available.

"It's still very strong," Sullivan said of the market. "We're averaging, some weeks, (sales of) 30 to 40 properties."