Good Time to Look for a Second Home?

"It is a great time to purchase investment properties everywhere in middle America from the Appalachian Mountains to the Rocky Mountains" due to income flow and low home prices, says Yun.

The beleaguered condo sector also might be returning to a point at which it makes sense for potential investors. Metro area condominium and cooperative prices, covering 59 metro areas, show the national median existing condo price was $226,900 for the third quarter, up 2.0% from $222,500 for the third quarter of 2006.

"We have seen stronger investment in the condo sector vs. the single-family. Investors favor condo properties because of less upkeep," says Yun.

For example, Sandpearl Residences condominiums in Clearwater, Fla., has not had to cut its prices in recent months because buyers who can afford to pay cash keep coming, says Steve McAuliffe, vice president of sales and marketing for JMC Communities, the developer for Sandpearl. But the property is offering some incentives, such as an option to buy units complete with furnishings that are offered at a discount. Of 117 units on the compound, about 10% are left for sale.

So for second-home buyers, particularly those who aren't in need of a mortgage to purchase their vacation home, it may be worth the time in the next few months to consider a purchase.