The sagging financial markets have made housing a more talked about investment alternative, yet the most active players are still the usual suspects.

According to some of the nation’s top real estate analysts, aging baby boomers and recent retirees are looking sooner to the second home market, betting that appreciation – coupled with comfort and peace of mind – will outdistance the return of other financial instruments.

“Some consumers who had planned on considering a second home are doing so earlier in their careers,” said Nicolas Retsinas, director of the Joint Center for Housing Studies at Harvard University. “They plan on working longer – being very active in some sort of employment in the 62-65 age bracket, perhaps some work they can do from a home office.

“Planning for this transitional phase has made a second home quite feasible from a financial standpoint. More income will be coming in the door for a longer period of time – not the conventional retirement picture we had two decades ago.”

Retsinas, the former director of the Federal Housing Administration, said the ability to easily tap in to home equity has eased the “locked-up” fears that once were attached to a home purchase.

“It used to be that if you put your money in a house, it was difficult and expensive to get it out,” Retsinas said. “The perception was that there was no liquidity in housing – all your eggs were in a hard-to-get-at basket. Now, that has all changed because home equity loans are so inexpensive and easy to obtain.”

Retsinas concurred with a recent National Association of Realtors survey that found most second homes are purchased for recreational use with only modest interest in renting the home for investment income. While the survey also indicated that the size of the vacation-home sector appears to be much larger than most analysts believed, Retsinas sees purchases coming closer to one’s primary residence.

“That second-home purchase is coming 100-200 miles from the family home,” Retsinas said. “The radius was probably greater before September 11 and I think one indication has been the reduction in air travel. And, with people wanting to stay employed longer, that second home 100-200 miles away makes it easier for them to get in an automobile and get back to their main employment center.”

Patrick Stone, CEO of Fidelity National Information Solutions, a huge corporation specializing in title insurance and housing data, said that if investors wanted to get involved in real estate, they would turn to REITs, or real estate investment trusts, rather than the single-family home market. The most common REITs typically buy and sell office buildings, retail centers and apartment buildings.

“Your Wall Street investor who has been dealing with a broker for years is not going to suddenly stop what he does and drive around in a Toyota pickup truck fixing up single-family homes,” Stone said. “An investor who believes in real estate is going to buy into a REIT and let a professional manage it.

“Second-home buyers are a different group. They probably are looking sooner, but most of them don’t plan to be landlords and let other people live in it part of the time.”

According to the NAR study, 51 percent of second-home owners said they bought or kept a second home for use as a vacation home, 18 percent were planning for retirement, 16 percent wanted to diversify their investments and 15 percent sought income from renting the property.

Ken Goldstein, an economist with The Conference Board, a New York-based nonprofit research and business group, said most investors – even though shaken be the past two years – still believe Wall Street is the place to make money.

“I think a lot of investors who have experienced the fluctuations in the markets view the present situation as temporary stuff,” Goldstein said. “Yes, the Tyco guys lied to us and a bunch of other business leaders did, too. But negative signs have been out there – long before the tech wreck – and investors and consumers will definitely still rely on the markets.

“All of this probably makes some feel better about looking for a second home sooner rather than later. They may even feel a little safer – but they would have ultimately looked for it despite the markets.”

Tom Kelly, former real estate editor for The Seattle Times, is a syndicated columnist and talk show host. Send questions and comments to news@tomkelly.com.