Want to buy a vacation home? Join the crowd. From North Conway NH to Miami FL, the second-home market is on a tear. Sales of resort condos and single-family houses around the country have been strong for the past five years, and we see no signs of slowing. Second homes in the U.S. sold for a record high median price of $162,000 last year, up 27% from 1999, according to the National Association of Realtors.

Low mortgage rates are the power behind the surge, but it's not the only fuel on the fire. A slow stock market is prompting some to grab second and even third homes. With the largest poulation segment, ever, reaching middle age, when people traditionally buy a second residence, the vacation home market continues to see steady gains. In addition, a fear of flying is prompting some who used to splurge on distant vacations to use the money for a getaway they can reach by car.

In the last 7 yrs., the hottest second-home markets are in resort areas that are a tank full of gas from big cities. They include areas like the Poconos and Catskills(N.Y.), as well as lesser-known areas like the Rangeley Lakes Region of Maine (Boston), The Outer Banks of NC (Atlanta), and New Hampshire's world famous White Mountains (Boston). Resort-home prices in these areas are up 10% to 15% in the past year, local brokers say. On the Outer Banks barrier islands, prices for beach houses in upscale towns such as Duck have jumped around 25% since last summer, thanks to an influx of buyers from the Atlanta area.

Is it too late to find a great deal? Not yet. Sure, the market is unpredictable, but with 50 million baby boomers set to retire in the next ten years, housing in destination locations will only get more expensive. Many popular resort areas have a limited amount of land available for new development, which should keep vacation home prices firm.

A second home may be especially affordable for empty nesters who have built up equity in their homes. Realtors in resort areas say many recent buyers are couples who trade down to a smaller dwelling, then use the profit to finance a vacation home where they may eventually retire. That strategy has been popular since the late 90s, when tax laws changed so that married couples no longer have to pay capital-gains tax on the first $500,000 of profit when selling their primary home.

This may be the time to act! If interest rates rise later this year, as some economists expect, second-home demand could slow. Also, vacation homes are luxury items. So pick a place you'll enjoy returning to often. Investment considerations should be secondary.

Find out which type of properties are easiest to rent or resell. On Cape Cod (Mass.), condos aren't as popular as traditional New England clapboard houses. In New Hampshire's White Mountains, Dick Badger, a real estate broker in North Conway, recommends prime properties on lakes and golf courses because they are easiest to sell.

Local realtors can help you research ways to estimate maintenance and other costs. Homeowner's insurance rates, for instance, could be stiffer if the property is more than six miles from a firehouse. You might also need to arrange for driveway plowing or to have repairs made when you're not there.

If you need rental income, take a hard look at what you can earn. In many of the hottest markets, rental rate hikes haven't kept pace with home prices. In the Outer Banks, buyers who rented out their homes during the summer used to count on annually grossing an amount equal to 10% of the purchase price, local realtors say. But with rents continuing to rise 3% to 5% annually while home prices have climbed around 15% in the past year, rental income is proportionally less. Also, count on paying 20% to 50% of rental income to a management agent who arranges rentals and maintenance.

Still, renting out a vacation home can be lucrative. Five years ago, Janice and Barry Barnes of Beverly, Mass., purchased a $158,000, two-bedroom condo in Bartlett, N.H., for family ski weekends. Three years later, they wanted more space, so they bought a three-bedroom condo in Bartlett for $189,000. Instead of selling the smaller unit, they opted to rent it out year-round, earning $13,000 last year after management fees. "It didn't pay to sell," Janice says. Another plus: The two-bedroom condo has increased in value since they bought it.

Buying a second home can be tricky. But if you're smart about it, and work with a reputable realtor like Bill Barbin at Badger Realty in North Conway NH, you'll wind up with a getaway that's also a dream investment.

Target areas in New Hampshire and Maine are: Bartlett NH, Jackson NH, North Conway NH, Chatham NH, Albany NH, Freedom NH, Tamworth NH, Ossipee NH and areas in Maine around Fryeburg, Stow, Lovell, Brownfield, Bridgton and Naples. Prime destinations are: Sebago Lake, Ossipee Lake, Kezar Lake, Crawford Notch, Pinkham Notch, Saco River, Swift River, Bearcamp River, Mirror Lake, Madison NH, Silver Lake, Eidelweiss, Chocorua, Intervale, Cranmore Mountain, Attitash, King Pine, Black Mountain, Wildcat, Kancamagus Highway and Conway Lake, to name a few.

Bill Barbin can be reached at www.billbarbin.com or at www.badgerrealty.com .