VIRGINIA BEACH, Va.--If there's one thing truer than ever in a slumping housing market, the success of a new-homes project hinges largely on two factors: location and price.

Two Virginia Beach home builders say they have a textbook example and the sales to prove it.

Terry Peterson Residential Condos and Napolitano Homes have begun the initial phase of Sajo Farm, a 295-home condominium development off Diamond Springs Road in Virginia Beach.

The community is just a couple of miles from Interstate 64.

Prices start at about $347,000 and go up to a little more than $512,000. Since the homes went on sale in February, buyers have closed on 16 units, and an additional 17 contracts are pending.

Few other local new-home projects are enjoying such sales.

New-home sales, though up slightly in September from a year ago, are down 14% from 2006.