Despite a 31% decline in sales, the 2007 NAR data also showed that the median sales price of vacation homes from 2006 to 2007 dropped only 2.5%, to $195,000. In the first part of this Recession, vacation homes held their market value even though sales fell by almost one-third in one year.

Almost half of the vacation homes NAR surveyed were in small towns (17%) and rural areas (30%).

Vacation home prices have also held up better than metropolitan housing, which dropped 20% in the 20 largest metropolitan areas tracked by the S&P/Case-Shiller composite house price index in the 18 months following a mid-2006 high.

In addition to second homes, rural areas are a market for owner occupied housing. Resident homeowners are both born-heres and come-heres, such as retirement relocators.

Think of your second home as an income-generating investment, not just as a personal residence. The NAR reported in 2007 that 84% of second-home buyers said they bought a second home for vacations or as a family retreat; only 25% said they bought to rent to others.

Setting up a second home as a rental property generates income and brings tax benefits. Start with IRS 527, Residential Rental Property and IRS 936, Home Mortgage Interest Deduction. Several books are also available.

Before buying a second home with the intention of renting it, discuss the IRS rules with your accountant and follow that plan.

2009 is likely to be a hard year in many ways. But picky buyers may find a gem in the dross. From a seller’s perspective, priced right is half sold; from a buyer’s, bought right is half the profit.