Vacation-home sales went up 4.7% to a record 1.07 million homes in 2006 from 1.02 million in 2005, driven largely by demographic trends. Meanwhile, investment-home sales dropped 28.9%, falling to 1.65 million homes in 2006 from 2.32 million in 2005, according to the group's annual survey of investment- and vacation-home buyers.

 Vacation homes Sales of vacation homes benefit largely from the country's demographics, because large numbers of consumers are in prime buying ages. The profile of a typical vacation-home buyer in 2006 was someone 44 years old, with a median household income of $102,200. Typically, these vacation homes were a median of 215 miles from the owner's primary residence, though 42% of vacation homes were closer than 100 miles and 32% were at least 500 miles away. While many of these vacation-home buyers are older than 50, those in their 40s may be driving the market in the coming decade, Lereah has noted. According to the report, 79% of vacation-home buyers wanted the property as a vacation or family retreat, 34% wanted to use the property to diversify their investments, 28% planned to use it as a primary residence in the future, 25% were motivated by the tax benefits, 22% intended for a family member or friend to use the property, 21% said they bought because they had extra money to spend and 18% plan on renting the property to others. The most popular location for the homes was in rural areas; 29% of the homes were purchased in the country. But 24% were located in resorts, 22% in a suburb and 10% in an urban area or central city. Most of the homes were detached single-family houses (67%), but 21% were condos and 8% were townhouses or rowhouses. Investment homes

Information gathered from source: Amy Hoak is a MarketWatch reporter based in Chicago.