For Jody McNamara of Hopkinton, Mass., summer, Thanksgiving and numerous long weekends throughout the year mean Cape Cod. That has been the case since she was a girl, and now she's passing the legacy on to her own children.

Like many others with fond memories of Cape Cod, she and her husband, Neil, bought a second home there, as did several of their siblings. In fact, last year, 6% of all home sales on Cape Cod were to people whose primary residence is elsewhere, bringing the number of houses on the Cape in use as seasonal homes to some 32%. This demand has contributed to a rapid price increase in the past few years, as well as a building boom that has attracted affluent buyers.

But last year's softening of the real estate market nationwide meant lower prices and fewer buyers, even for sought-after Cape Cod. New home sales in the Cape -- both second/vacation homes and primary residences -- slowed, down 20.4% in 2006 compared with the previous year. The average price, however, fell much less, just 2.9%, and even rose in a couple of areas, according to data provided by The Warren Group, which tracks the New England property market.

However, following a sluggish start to the year, realtors on the Cape are starting to see buyers return.

"We're very optimistic here," says Keith Bradley, a realtor with Coldwell Banker Atlantic Realty in Chatham, a high-end community in the Lower Cape at what looks like an elbow on the 413-square-mile Cape Cod peninsula. Since the beginning of the year, Mr. Bradley has seen the inventory of single-family homes drop from a high of 230 to the current 175. "Last year, we had a lot of homes on the market and no one was looking. Now people are looking again." February is traditionally the start of the second-home market on Cape Cod, because most buyers want to be in a house for the summer months, Mr. Bradley says.

"December and January were slow, but now it's going crazy again," says Linda Collins, a realtor with At the Cape Properties in Orleans. In 2006, Ms. Collins watched as inventory went so high that she was hard pressed to see them all on realtors' weekly tour day. Now, new listings have slowed and sales are picking up.

While the majority of second-home buyers live within a four- or five-hour drive, some come from as far away as California and Europe, having previously fallen in love with the Cape. They look everywhere along the Cape, but the higher-end homes are concentrated in Osterville, Chatham,Wellfleet,Truro and Orleans, says Annie Blatz, a realtor who manages the Brewster and Yarmouth offices of Kinlin Grover GMAC, and is president- elect of the Cape Cod & Islands Association of Realtors.

There are, however, $1 million-plus homes to be found all along the coastline. In Cape Cod, no home is too far from a beach but in general, the closer to the water, the higher the price. The northern shore borders on Cape Cod Bay, while the southern runs along Nantucket Sound until it turns north and continues another 30 miles into the Atlantic Ocean. In addition, there are many protected inlets, perfect for boat docks, as well as small lakes and ponds.

Among the most expensive homes now on the market is a $15 million new-build along North Bay in Osterville. "It's one of the most upscale in Osterville," says Jerry Epstein of Prudential Premier Properties. At 12,000 square feet, it's also one of the largest in an area that Mr. Epstein says generally offers homes of 2,000 to 4,000 square feet. It sits on 11 acres of waterfront property with a sandy beach and a boat dock.

Jim Crocker, whose family has lived on Cape Cod since 1632, notes that beachfront land, without a house, can sell for up to $3 million, while property that has access to a boat dock starts at $600,000 and "water view" land at $500,000. Mr. Crocker keeps track of this because, in addition to his work as principal broker at Wianno Realty in Osterville, he is a builder. New homes can be built on the peninsula for about $150 a square foot for a modest home and up to $350 to $400 a square foot for a multimillion-dollar house, he says.

In Hopkinton, the McNamaras are a 90-minute drive from their South Yarmouth second home, so it's easy to pile their two children and their dog in to the car and head to Cape Cod for the weekend. Both have close ties to the area. Mr. McNamara grew up a four-minute drive away and Mrs. McNamara vacationed there as a child.

Initially, they bought a house in Barnstable with her brother and his wife. A little more than a year ago they decided it was time to go it alone and found a $1.3 million home with historic underpinnings at the mouth of the Bass River in South Yarmouth. The main portion of the house, which features a large common room and several smaller ones, was built in 1880 and was originally part of a neighbor's home. Sometime in the 1930s or 1940s, the owner split the two houses and added onto theirs.

Importantly, the house has a pool, plenty of room for family gatherings, a homeowners' association-maintained boat dock and beach on the river, and is five minutes from a large public beach on Nantucket Sound. Their old Barnstable neighborhood was inhabited primarily by year-round residents; the new one is almost all vacation homes, but the kind, says Mrs. McNamara, "that tend to stay in families for generations."

Lisa and Chris Smith had been vacationing on Cape Cod for 20 years before they decided that "they were probably going to keep coming back" and bought a $560,000 ranch house in Chatham that's in a quiet neighborhood and walking distance to a beach. Like others who know the Cape, they were particular about where they wanted to be. "It's a charming walking town," says Mrs. Smith from her Washington office. A consultant for law firms, Mrs. Smith and her husband, a consultant to financial-services companies, and their two children fly from their Bethesda, Md., home to Provincetown or Boston and rent a car for short visits, but make the nine-hour drive when planning a longer stay.

There are a lot of retirees in the Smith's Chatham neighborhood and that is not surprising, says Bob Churchill, president of the Cape Cod & Islands Association of Realtors and a buyer representative for Churchill Associates in Yarmouthport. "Many baby boomers are buying second homes that will become their retirement homes," he says. He typically sees three categories of buyers: Baby boomers; retirees; and some younger families who have been coming to Cape Cod since they were children and want to give that same experience to their own children.