Despite high prices and tougher standards required by mortgage lenders, many Americans place a high priority on acquiring a second home for vacations or investments. In fact, those purchases make up about a third of all home sale transactions, according to a report from the National Association of Realtors.

A recent trend is emerging in the second home market. Buyers who would normally look for an exotic get-away vacation property in a foreign country are now drawing the line closer to home. They still want a location away from the United States' mainland 48, but are minimizing travel time, passport hassles and rising travel-related costs by staying within the country — they focus on Hawaii and Alaska for their escape locale.

Many mainland residents perceive Hawaii as an island paradise in the Pacific. Our 49th state is actually a series of islands, recognized for its temperate climate. It's known for its large variety of condo units, mostly located in and around the Honolulu metro center. Prices are among the highest in the country.

"If there is one generalization that can be made about living in a tropical island paradise anywhere in the world, it's that there is a certain pace and attitude that is slower than what we expect in Chicago, Indianapolis, Dallas or Des Moines," Steve Bergsman wrote in his new book, "Passport to Exotic Real Estate," which is published by John Wiley & Sons, Inc.

Although homes are very expensive in Hawaii, many of the properties are quite old and need renovation work, Bergsman noted. "The value is actually in the land, not the structure. When new buyers move in, they often need to upgrade their dwelling. As the island's residential real estate markets have boomed in the past few years, so has the need for additions and alterations. Many of the condos are now 30 to 40 years old."

In Hawaii, most of the land is owned by trusts dating from the time when the islands were a monarchy and a few large estates owned the land, the new book points out. After statehood, these trusts retained land ownership.

"Island living is either an attraction or a distraction. You live there because of the quiet lifestyle, or you have to leave because it drives you crazy," Bergsman writes. "Weather is a key factor when choosing a location in Hawaii. The lanai is an important feature in architecture, but it has to be facing the right direction to catch the cooling winds."

Alaska offers a sharp contrast in climate for the second home buyer. Despite the frigid cold winters, its summers offer different natural beauty. Vacation homes often take the form of a remote cabin or ski condo.

Prospective buyers should know that Alaska is a nondisclosure state, according to Bergsman. "When a home is purchased in most states, the price of the transaction is published or listed publicly. In Alaska there's no obligation to report the selling price. That means the area MLS (multiple listing service) cannot access sales prices. They use assessors to determine the value of properties."

The most popular location for Alaskan vacation homes is in its central valley, stretching from the Anchorage metro area north to Fairbanks. However, the state is so huge that a cabin can be built almost anywhere.

"Don't fear the loss of civilization when considering a second home in Alaska," Bergsman said. "Many vacation home locations are within driving distance from Anchorage, and that includes lands along the popular Kenal River, where Alaskans claim is the best salmon fishing river in the world."

Large tracts of land can be acquired at very reasonable prices in Alaska. Road and water access, vistas and many other factors affect pricing. The more remote the location, the more important it is to consider the logistics of supplying the property and providing for necessities such as running water. And the buyer will need to learn to live with local wildlife.

"Vacation home sales will remain strong for the foreseeable future given the fact that baby boomers are favorably positioned in terms of affordability, as well as being at the stage in life when they are most interested in making that kind of lifestyle purchase," said David Lereah, chief economist for NAR.

Q: Are many foreigners buying real estate in the U.S.?

A: Yes, a substantial flow of real estate transactions — primarily homes — in this country involve foreign buyers, it was revealed in a new study and report by the National Association of Realtors.

The report estimates that between 150,000 and 190,000 homes were sold to foreign nationals from May 2007 to May 2008. Recent foreign buyers purchased properties in every state: the most popular being Florida, California, Texas and Arizona.

"The U.S. housing industry truly has no boundaries," said Richard Gaylord, NAR's president. "Many international buyers recognize that real estate is an excellent investment and are drawn today by abundant inventory, low interest rates and a softer dollar."

The typical international buyer purchased a single-family vacation home costing $297,400. About 40 percent of foreign buyers paid cash for their purchase, compared with 7 percent for all domestic buyers. The typical international owner stays at his or her U.S. property for 2.6 months during the year.

Foreign exchange rates help make U.S. homes more affordable for international buyers. Home prices are also now more reasonable in the U.S.

International buyers are distinct from domestic buyers. Foreign buyers tend to purchase more expensive properties, averaging 36 percent higher cost than the typical domestic buyer's home purchase — more than 14 percent of properties bought by international purchasers sold in excess of $750,000. Foreign buyers also show a greater preference for condos and townhomes, compared to domestic purchasers, according to the report.

To find out more about Jim Woodard and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.

COPYRIGHT 2008 CREATORS SYNDICATE INC.