Location, location, location. Today more than ever these may be the crucial ingredients for successful real estate investing, as climbing interest rates and a slowing economy make property returns ever more elusive.

Despite the slump in many real estate markets, there are pockets of resistance around the country. In certain areas the recent data show continued strength, and you are likely to hear those magic words: “We’ll never see a downturn.”

Among the most buoyant markets these days are high-end resort communities like Palm Beach, Nantucket, and Aspen, where a combination of limited supply and typically wealthy buyers do lend the markets a sense of invulnerability. Astonishingly, despite double-digit price increases in the past few years, these markets are feeling no pain.

Aspen is especially robust. Figures just released by the Land Title Guarantee Corporation show that sales for Pitkin County, home to Aspen, Snowmass, and a few other towns, totaled $2.24 billion last year, up 40% from the prior year, which was itself a record. In December alone transactions amounted to $191 million, more than double the year-earlier level.

The locals ascribe this energy in part to the shrinking amount of land available for development. In Pitkin County, 85% of the land is owned by the government, and the rest is closely controlled. In Aspen and Snowmass, there are precious few undeveloped tracts of land. A recent and rare condo project in Snowmass sold out within hours; buyers were that eager to get in early.

The owner of Alpine Properties and a member of the local planning committee, George Huggins, said, “I know all the projects coming along. There are no more subdivisions. Snowmass is basically done with new single-family home sites.” That puts a backstop of sorts behind the home prices in Snowmass, where a five-bedroom ski-in-ski-out home may run as much as $7 million.

Scarcity is also cited by Brent Waldron of the realty firm Coates, Reid and Waldron. He says the inventory of homes available today is less than half what it was a year ago. He says homes are increasingly being bought by owners/users, as opposed to people intending to rent out their properties or speculators. Turnover, consequently, is down.

The local market also benefits from an abnormally low exposure to the credit markets. In Pitkin County, 67% of purchases are all-cash. In Aspen and Snowmass, the figure is even higher. Mr. Huggins confirms that “most of our deals are cash.” He describes the market as being up 50% year-over-year in some segments.

Interestingly, Aspen is also benefiting from a retirement boom, much like Palm Beach. Sonny D’Anna, chairman and CEO of Aspen Land & Homes, a Sotheby’s affiliate, says, “There has been a switch in the market. It used to be that our clients were buying second or third homes. Now 80%-90% are buying as a primary residence. People used to purchase these homes in order to spend one or two weeks out here. Now they are planning to spend two to four months.”

That dynamic changes the landscape. If we consider that some 80 million Americans are expected to reach retirement age over the next two decades, communities that appeal to senior citizens will certainly fare better than average. But ski country? Anyone who has struggled to put on ski boots recently has to wonder how many octogenarians are likely to be hitting the slopes.

Indeed, according to some market observers, those retiring to Aspen are not likely to be lining up for the ski lifts. Instead, they are drawn to the beauty of the place, the active lifestyle, and luxury amenities. After all, here is a town of 8,200 permanent residents where Gucci, Bulgari, Prada, J. Mendel, and other high-end retailers have opened in recent years.

That raises questions for the Aspen Ski Company, which operates four ski resorts in the area and is struggling to return to the peak ski season of 1998-99. Since Aspen is not a “drive-to” ski destination, the residents and visitors who rent condominiums or hotel rooms are essential to ski operations.

Complicating matters has been a shrinkage in so-called “hot beds” that cater to families on vacation. As hotels in the area have been sold as condominiums or have converted to fractional ownership, the number of facilities available for vacationers has shrunk. The development project in Snowmass, in which Aspen Ski Company is a partner, is aimed at reversing this trend.

Though home sales are strong, they are not necessarily benefiting the ski resort. According to an Aspen Ski Company spokesman, Jeff Hanle, the mountain is enjoying one of its best years in a long time with a 6% increase in skier-days, a measure of activity. However, recent gains may not be sustainable if more properties are taken out of the rental pool.

Just how expensive is Aspen real estate? According to Mr. D’Anna, single family homes are selling for $1,200-$1,400 a square foot, up from $950-$1,000 18 months go. A recent guide put out by BJ Adams Real Estate describes Aspen homes falling within a range of $1.5 million to $20 million. According to Mr. D’Anna, there are perhaps five properties on the market priced at more than $20 million. He argues that despite the increase, Aspen is a bargain compared to comparable properties in the Gold Coast of Florida or Southern California.

Could the market weaken? The only downturn in recent memory was brought on by the terrorist attacks in September 2001. Real estate prices fell by about 5%-10%, Mr. Huggins recalls, and then remained flat for a couple of years.

Short of another such calamity, most observers are optimistic. Mr. Huggins is especially enthusiastic. “Aspen is a unique town,” he says. “It has culture, beauty, everything. There’s no place like Aspen.” Especially when it’s home.