By Suzanne Cosgrove Tribune staff reporter

Scratch nearly any real estate developer these days and you will get water—plans for developments on or near a lake, river or at least a pond.

Amid the shifting tides of the housing market, it's a sector that is staying afloat as Baby Boomers nearing retirement look for a getaway, or for a place where their children will be drawn for visits, experts say. And places on the water abound, in Chicago, its suburbs, and outlying parts of the Midwest.

"People buying a second home still look for water—a lake, river or even the ocean. This has been a primary driver of the market for vacation homes in many parts of the country," said Douglas Duncan, chief economist for the Mortgage Bankers Association.

It also is a big part of the primary housing market. Lynn and Drew Mays were among the first to sign a contract for a large, two-bedroom townhouse at Riverwalk Place in McHenry, a project built by Lanco Development Co.

The couple has their own dock on a lagoon about 40 feet from their back door, Drew Mays said. Boone Lagoon empties into the Fox River, which connects to the Chain of Lakes.

Although the townhouse is the Mays' primary residence, "it feels like when we get home, we're on vacation," he said.

With his boat out back, "we can use it for an hour or so. It doesn't have to be an all-day thing," he said.

Mays said he lived in Mt. Prospect for more than 20 years, but visited friends who retired in McHenry and liked it.

"We walk everywhere. The theater is a block away," he said.

Before settling on Riverwalk Place, "we put money down on three different places, but they weren't the destination we were looking for," he added.

A National Association of Realtors' report released last month found that 27.7 percent of homes bought in 2005 were for investment purposes and 12.2 percent were vacation properties. Total sales of second homes rose 16 percent last year, the NAR said, to 3.34 million.

"Half the fun of owning a place [near the water] is that it's always in your mind," said Karen Conner, president of Esperanza Development Group Inc., in New Buffalo, Mich., explaining her initial interest in owning a vacation home.

"Vacation-home buyers are making lifestyle choices and purchasing primarily for their own enjoyment," said David Lereah, the NAR's chief economist. "Investment-home buyers are seeking rental income and portfolio diversification, although vacation-home buyers also mentioned diversification."

For those buyers who are more interested in escaping suburbia for downtown Chicago than for the distant countryside, high-rises can be transformed into urban water retreats.

Retirees Peggy and Joseph Cassidy bought a three-bedroom condominium with two balconies in downtown Museum Park, a high-rise developed by The Enterprise Cos. with views of Grant Park, Navy Pier and the Museum Campus.

The couple grew up in Chicago, Joseph on the South Side and Peggy on the North Side, but spent many years in a house in suburban Shorewood, near Joliet.

"When we retired, we wanted to come back," said Joseph Cassidy.

He said he and his wife like the "feel of the neighborhood," and the building's closeness to the Loop.

"You can get almost anywhere," Peggy Cassidy said. In addition, the view of the lake from the condo is different from anywhere else in the city, Joseph Cassidy said.

"Looking north, you can see the fireworks [at Navy Pier] in the summer," as well as the Venetian Night festivities at Monroe Harbor, he said. "You can see the sunrise in the morning . . . [over] the blue of the water."

An Indiana native, Conner said she bought her first cottage in 1982 in Michigan's Harbor Country for about $25,000 while she was working for Chicago's then-Mayor Jane Byrne.

A busy single mother with three sons, acquiring the cottage "saved her life," she said. She began rehabbing cottages, a skill she honed for 15 years, then began constructing new properties.

Conner is the developer of Walden, a 22-home community in New Buffalo, that she said is aimed at area buyers 40 to 80 years old who want the peace and quiet of the countryside without the work of maintenance. Six of the residences have been sold so far, she said, but none as year-round residences.

Harbor Country, a longtime resort community along Lake Michigan, is about 90 minutes from downtown Chicago. Its towns include New Buffalo, Union Pier, Michiana, Grand Beach, Lakeside, Three Oaks, Harbert and Sawyer.

The two- to three-bedroom cottages at Walden, with 1,224 to 1,850 square feet, are "plunked down" amid 90- to 100-foot oak trees on land that was previously an old farm, Conner said. Gravel roads link the properties to the main roads, and most plant and wildlife is untamed, she said. Prices at Walden range from $345,000 to $449,000.

Walden differentiates itself from what Conner calls "overblown cottages" in the area that may have as many as five bedrooms and two-car garages.

If a buyer likes the big-house concept, options also abound. For example, the Swans Way development in Harbert, Mich., features Sun's End, a four-bedroom home with more than 3,700 square feet of living space listed at $1.349 million.

And developer and interior designer Susan M. Fredman is planning 19 luxury single-family homes on half-acre home sites at Stone's Throw in Union Pier. Prices begin at $689,000, according to Rubloff Residential Properties.

St. Paul, Minn., attorney Charles Berquist used Internet site Lakeplace.com to narrow his search for a home facing the water. He is buying a lake home near St. Croix Falls, Wis.

The site, founded by Internet entrepreneurs Dave Gooden and Cameron Henkel in 2002 after they looked for their own lakefront retreats, is an online real estate service that includes more than 11,900 lake properties for sale in Wisconsin and Minnesota, and is expanding into Michigan this fall.

It also lists rental homes on the water, "which is a great way to start . . . before you make the commitment to buy," said Dane Charles, a Lakeplace.com spokesman.

Berquist said he and his wife had been in the market for a second home for about two years, but found it hard to look for something out of town, which he said often involved a long, frustrating drive.

Berquist said he's found a lot of pre-retirees and retirees on lakes in the Midwest. Prices have increased so much, many younger people have been priced out, he said. "I don't see many small cottages left." Homes on the lake where he bought his home go for around $500,000 and up.

A parent of college-age offspring, he added that friends who have bought similar homes "say that's where the family congregates."

Older children "don't want to go out to the suburbs, but will go to a lake home," he added.

Jane Neufelder and her husband Dan, who are about 10 to 15 years away from retirement, see their cozy three-bedroom, three-bath home at Walden in New Buffalo as both a family gathering place and a real estate investment.

"We've been going to that area for a long time," Neufelder said. "We wanted a home that didn't look like a suburban home, but a vacation home."

The Walden development is not directly on the water, but is less than a mile from the public beach, which is fine with Neufelder.

"Part of that mile is walking through a charming town [New Buffalo]," she said. Another plus is that "in this area, houses are a little farther apart than some of the older homes in Union Pier," she said.

The Neufelders' main residence is now Appleton, Wis., but they plan to keep the New Buffalo home, Jane Neufelder said. They have a daughter who is a college freshman, and "for her, and for us, it will be a great place to reconnect with friends."

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