The real estate industry and its pundits were stunned to learn, that nearly one in three homes sold in the United States in 2004 was a second home or investment, according to the National Association of Realtors. Second-home sales were up 16.3 percent from 2003, to over 2.82 million second-homes sales.

Second homes are a rapidly-growing market, agrees Pamela O'Connor, CEO of RELO, a network of top independent and franchise brokers across the country. Here are some reasons she feels the trend will continue.

• In a recent survey of the wealthiest 10 percent of Americans, 8 percent reported plans to acquire a vacation home in the next year, up from less than 6 percent a year ago.

• While 64 percent of the affluent second-home buyers are 55+, younger groups and the middle class are joining them.

• "Second" home is a bit of a misnomer, as more and more affluent buyers have multiple homes.

• An increasing number are buying a "second" home that is more expensive than their primary residence. The second home is often the "dream" home.

Reasons for buying second homes have multiplied beyond the vacation retreat, suggests O'Connor. Fueling second-home sales are:

• The use of recreation/vacation homes for family getaway time and to attract 20-something children, extended family and grandchildren visit.

• Increase in commuter marriages. DC-area and Dallas examples include a situation where the husband is retired, but the wife is still working a big job; the other is a younger couple who are both in good jobs in different cities.

• Corporate upheavals have resulted in some workers opting to buy a small condo and commute for a time to be sure the job is secure before they uproot the family.

• Condos for college kids because decent campus housing is scarce, dorms are too expensive, and/or an investment is desired.

• Condos for rabid football fan alumni in need a place to stay when they go back for football weekends; there are actually time-shares based around this. We have started to call these "event" homes.

• Pied-à-terres in the city for suburbanites who want to spend weekends in the city, or for executives who commute long distances and need a place to stay overnight.

• Baby boomers who still have a few years to work, but are anticipating retirement, so they buy a vacation home now to make sure they like it and to lock in prices before they go higher.

• Shared purchases: We are seeing more incidences of family members or friends buying a second home together to share the costs and justify the usage.

• There is a new "fractional ownership" trend for "residence clubs," which are similar to time-shares but differ in terms of ownership structure and usage rules.

• Hotel condos are gaining popularity because they can be rented out when not being used and offer hotel amenities.

• Investment: "Recently, a D.C. Afghan cab driver told me about countrymen who have bought marginal homes, fixed them up, rented them out, sold at a profit, and have become wealthy as a result," explains O'Connor. "This is not as easy as it sounds, but if the commitment and timing are there, it can be lucrative."

Where are people buying second homes?

"Both coasts still lead (primarily in CA and FL) as vacation home destinations," says O'Connor, "and many of the recreational purchases are within a two to three hour driving radius of big cities, on lakes, in the country, etc."

She also notes that more homebuyers are buying offshore, according to RELO affiliates. "We have affiliates in 20 countries and are seeing a slight increase in buyer referrals to Mexico, Bermuda and even some European markets," says O'Connor. "And land is attractive. Some are buying ranches and farms they can enjoy on weekends, or hope to live on in retirement."

How do homebuyers typically search for second homes?

"Often, they buy in recreational areas where they have vacationed," observes O'Connor. "Increasingly, they rely on real estate agents/companies in their primary residence cities, to refer them to national network colleagues in their destination towns."