With housing values continuing to fall and mortgage interest rates at record lows, this has to be the best time in decades to buy a property – if you have the cash and credit to get to the closing table.

In the latest set of numbers, the National Association of Realtors reported that more than 60 percent of existing home sales were distressed properties – either foreclosures or short sales.

Plenty of those homes for sale are located in traditional second-home territory: water-front properties in Florida and along the Gulf of Mexico; sunshine states like California, Nevada and Arizona; and, ski-lovers’ communities in Utah, Wyoming, and Colorado.

But the truth is that there are plenty of outstanding second home locations near every major metropolitan area where home buyers can get a lot of house for their money.

According to the latest HomeAway Vacation Rental Marketplace Report, some 15 percent of existing vacation homeowners say they bought a vacation home because of the decline in real estate prices. Another 12 percent of existing vacation homeowners said they are interested in buying another vacation property due to the lower prices.

The study also found that nearly a quarter of owners (22 percent) say the increase in foreclosed homes has prompted them to bargain hunt for vacation real estate. And, 5 percent of vacation homeowners have purchased a foreclosed home within the past two years.

HomeAway’s report also found that 48 percent of owners who financed their vacation home are able to cover more than 75 percent of their mortgage by renting it to travelers, up from 38 percent just one year ago. (You can thank housing affordability, which is at nearly a record high at the moment.)

Where should you look for a second vacation property? The following locations showed the largest increase in vacation homes being listed for rent in the Q1 2011: Amelia Island, FL; Galena, IL; Hollywood, CA; Charleston, SC; New Orleans; Tenants Harbor, ME; Nashville, TN; Rockport, TX; Austin, TX; and San Clemente, CA.

How do these locations compare to the fastest-growing travel destinations? The report concluded that the following locations are seeing the biggest increases as travel destinations: New Orleans; Amelia Island, FL; Lake Arrowhead, CA; Wimberly, TX; Charleston, SC; Hollywood, CA; Austin, TX; Lake George, NY; Pentwater, MI; and, Chicago.

You might not think of some of those properties as being vacation destinations, but the vast majority of second homeowners like to purchase properties that are within 150 miles from their primary residence, vacation real estate experts say. That distance translates to a 3-hour commute one-way, which is about the maximum amount of time a homeowner wants to spend driving to a vacation home.

The good news is that there are plenty of great vacation properties to buy at extremely low prices and at record low interest rates. Timing is everything and Realtors are asking: How about a third or fourth vacation home?