The housing market is rough right now, but the market for vacation homes is even worse. 

People aren't buying many vacation homes these days. So how's a second home owner supposed to unload that property? Stand on a street corner with a sign that reads, "Selling vacation home, please help?" That's one tactic, but there are other strategies that could be more fruitful. 

A 2008 report by the National Association of Realtors (NAR) indicates that vacation home sales dropped by almost 31 percent last year. And the prices dropped, too: the median price of a vacation home in 2008 was $150,000, a $45,000 dip from the median price in the prior year.

Know where you stand

If you're a second home owner, selling your vacation home in this environment obviously could prove to be challenging. Start by analyzing your current situation. If you want to sell the property because your mortgage is strangling you, you'll likely face some tough decisions. Find out what the home's current value is, and compare it to your loan balance. Discounting the price for a fast sale is one option, if you have room financially to do that. But if your loan balance is close to or more than the property value, you may have to pursue a loan modification or short sale with your lender. Be prepared for a battle, though. Lenders have been reluctant to take those measures on second homes. 

You have more flexibility when you can afford to hang onto the second home for a little while longer. If the house isn't currently rented, consider offering it as either a long- or short-term rental. Interview local property managers to evaluate the demand and rent prices. Then, make an informed decision about how much income the property can produce, relative to the expense you'll incur by keeping it. You could rent the property on a month-to-month basis, and then put it up for sale as soon as sales and prices stabilize.

Sweeten the deal

Another tactic is to jumpstart a sale with big incentives. You could throw in the furnishings, or offer cash toward closing costs. A 2008 article in Forbes magazine listed even more extravagant incentive ideas, such as a car, the promise to match future price declines, or points on the buyer's mortgage.

Reposition the property

Depending on where the property is located, you can avoid the slowdown in vacation home sales by making your property into a primary residence. Look at your home and its location objectively, and ask yourself if you can play down its resort appeal. Does it need more closet space or better appliances for year-round living? Consult with an experienced realtor to discuss small changes that will add to the primary residence appeal. 

If you still can't sell the home, go ahead and pull out that "selling vacation home" sign. Maybe you'll get a spot on the evening news, and the exposure will draw buyers out of the woodwork.

Options are few and far between for second homeowners who can't afford the mortgage anymore. But you can always attempt the refinance second home process.

In the 1996 film The Rock, character Stanley Goodspeed finds himself stuck on Alcatraz Island with an ex-con, a team of irrational Marines, and a supply of deadly gas warheads. Stanley doesn't have a lot of options for survival. If you have a bad mortgage on your second home, you might know exactly how Stanley feels. 

Since the mortgage crisis began a few years ago, the U.S. government, the FDIC, and big mortgage lenders have rolled out various programs to help homeowners survive these turbulent times. Unfortunately, the vast majority of these initiatives are geared toward the ownership of primary residences. In other words, owners of second homes need not apply. 

The rationale for excluding second homeowners is reasonable.  Rule-bending legislation is not intended to help people keep assets they can't afford; it's supposed to keep people from becoming homeless.  That's no comfort when you're facing a foreclosure on your second home.  

What are your options? Like it or not, you may only have four: get a mortgage refinance, sell the property, declare bankruptcy, or let the lender foreclose.

Refinance second home

Mortgage rates are low right now, which makes it a great time to engage in the refinance second home process.  This can be more expensive and more difficult to obtain than a first mortgage refinance. But if you can get the deal done, you'll keep your credit and your investment intact. Your biggest challenge will be the home's value. If it has fallen substantially, a mortgage refinance may be impossible, unless you can borrow enough money from another source to pay down the mortgage debt.

Cool market for property sales  

Selling is problematic because the deal may not happen quickly enough or for the right price. Explore outside-the-box alternatives, such as offering a lease-to-own deal, or giving special incentives to speed up the sale. If those aren't workable, talk to your tax advisor about the implications of a short sale. In this process, the lender takes the proceeds from the sale of the home and writes off the remaining debt. The forgiven debt on a second home mortgage could be considered taxable income, though. Once you know what that impact might be, approach your lender with the short sale idea.

Bankruptcy hurts

Bankruptcy court judges have the authority to modify second home mortgages. This is a last resort option, though, because you can't predict how the court will address your particular situation.

Let the chips fall

If the rest of your finances are in good health, and you have no workable options for the second home, ask your lender about a deed-in-lieu of foreclosure. This strategy at least allows you to move on from the situation relatively quickly. It's not an ideal solution, but it's better than being stuck on the foreclosure island, waiting for your eviction notice.