1. Plenty of recreational opportunities. There has to be lots of stuff to do beyond shopping, which is why most thriving resort towns are near ski lifts, beaches or mountains. Some cultural cachet -- a theater or film festival, galleries or museums -- is also nice.
2. Decent weather. You have to be able to get outside to enjoy all that recreation!
3. Significant commercial investment. The old-timers may grouse about the new hotels or malls, but these are good indicators that others think the community is on the way up.
4. Proximity to growing urban centers. Vacation towns typically need to be within a two- to three-hour drive of a major city, or at least reasonably close to a big airport.
5. The "it" factor. The community gets “discovered” by movers, shakers and celebrities -- or at least enough other folks like you -- for prices to get bid up. Consider the following list of hot (and potentially hot) vacation home markets compiled by EscapeHomes.com, an online listing service for second homes, timeshares and other vacation property. You'll see some interesting similarities, as well as a few towns that break the rules.

The top 10 towns for second-home investments
EscapeHomes.com identified popular second-home destinations that appreciated at least 10% a year in value between 1998 and 2002 and which may have further to go. The results are based on their own listings for real estate in these communities.

Listings aren't sales, though, and EscapeHomes.com doesn't reflect the whole market. In fact, real estate professionals in some of these towns (Asheville, N.C., for example) say sales were never that hot, while those in others (Park City, Utah, and Sunriver, Ore.) say appreciation has slowed in recent years. Price appreciation figures from the Office of Federal Housing Enterprise Oversight, which oversees housing financiers Fannie Mae and Freddie Mac, have been included where possible.

With those caveats aside, here are the Top 10 second-home investment markets:

Myrtle Beach, S.C. The beaches along “The Grand Strand” -- and the area’s 120 golf courses -- draw 14 million visitors annually. Despite the crush, Myrtle Beach consistently winds up in various listings of the nation’s best beaches and best retirement towns, with home prices rising at an 8% annual clip. For information on second home sales in Myrtle Beach, go to The Myrtle Beach Resort or call 888-627-3767.

Asheville, N.C. This mountain town boasts the Biltmore Estate and a thriving arts and crafts community. Home prices are up 35% in the past five years, compared with the national median growth of 27.8%.

Park City, Utah. The Olympics-related frenzy has cooled, but Park City is still a preferred destination for skiers and other winter sports fanatics. Prices this year are up between 5% and 7%, according to real estate broker Mike Sloan, statistician for the area’s Board of Realtors.

Ashland, Ore. Lovely weather, lovelier scenery and cultural cachet combine in Ashland. Located about halfway between Portland and San Francisco, the town is also home to Southern Oregon University and the highly regarded Oregon Shakespeare Festival. Ashland’s home values have exploded in recent years. Home prices in the region that includes Ashland and nearby Medford have risen at least 40% since 1998, according to federal figures, while a local appraiser puts Ashland’s average home price growth closer to 70% in that period.

Port Townsend, Wash. This picture-perfect Victorian seaport lay nearly untouched for most of its long history until being “discovered” by Seattle yuppies in the 1990s. It’s still quaint, but relatively mild weather and proximity to Olympic Peninsula attractions have increased its appeal for retirees and urban refugees.

Beaufort, S.C. You know Beaufort, even if you’ve never been there. You’ve seen it in movies like “The Big Chill” and “Forrest Gump,” and you’ve read about it in the pages of “The Prince of Tides” and “The Great Santini” by one-time Beaufort resident Pat Conroy. Fishing, shrimping and a National Historic Landmark District are features of “The Queen of the Carolina Sea Islands.”

South Lake Tahoe, Calif. Though it shared America’s largest alpine lake with the more glamorous Lake Tahoe, Nev., this community was long the dowdy little sister. No more. Two new Marriotts have replaced a strip of decaying old motels along the main drag, and there’s talk of a convention center. Median home prices are up 21% from last year, said Madeleine Gutierrez, vice president of the South Lake Tahoe Association of Realtors.

Daytona Beach, Fla. Nineteenth-century industrial barons popularized Daytona, which is probably best known for the international raceway built in 1959 and the Daytona 500 auto race. Eight million visitors pour through annually. Home prices are up 44% in the past five years and nearly 9% in the last year alone.

Sunriver, Ore. This central Oregon resort area is near Bend and the Mt. Bachelor ski resort, about four hours from Portland and two hours east of Eugene. Whitewater rafting, hiking and skiing are favorite pastimes. Prices on some properties are about double what they were eight years ago, realtors say, but appreciation has slowed down in recent years along with the economy.

Charlevoix, Mich. This little town lies between the shores of Lake Michigan and Lake Charlevoix in northern Michigan. The population of the town and surrounding area is 8,500 full-time residents -- which climbs to 30,000 in the summer. Golf courses and water fun are the main attractions.