Looking to buy or sell a second home or retirement home? There are still bright spots in the market that are cheering sellers and buyers alike.

You don’t need a weatherman to know today’s real estate market is slow, slow, slow. But did you know there are extraordinary bright spots where properties still sell in the wink of an eye, usually for the asking price? That strong buyers are still hunting for special properties? And did you know that baby boomers in particular are on a search for houses that will work today as second homes and a few years later may turn into full-time retirement residences? Buckle up for a fast ride into good news about housing.

The transformational reality that is rewriting the real estate rules: “This now genuinely is a global market,” says Satbir Khanuj, CEO of SecondSpace.com, a Web site that helps users develop a lifestyle based around a second home. Khanuj points to affluent buyers from India who are seeking second homes in New York, Chinese who may be looking in Seattle, Russians who are shopping in Dubai, and Europeans who are drawn to the sun and surf of south Florida. “We track where [Web site] users come from, and we’re seeing an uptick in visitors from abroad,” Khanuj says.

One big draw for foreign buyers is the comparatively weak dollar. (Worth roughly the same as a euro five years ago, a dollar is now equivalent to about 0.7 euros — which means a 30 percent gain in purchasing power for Europeans.) Add in broad price drops in most U.S. real estate markets (16 percent in California in the second quarter of this year, for instance, and 18 percent in Las Vegas), and bargains abound for foreign shoppers.

What does this mean for Americans? “This is a perfect time to buy,” says Jim Gillespie, CEO of Coldwell Banker. Of course, there’s some self-interest on his part, but don’t be too quick to dismiss Gillespie’s thesis. He notes that falling prices benefit domestic buyers, as do very attractive interest rates (strong buyers are landing 6 percent fixed-rate loans). Even better, in most markets there are a lot of options available.

“Many markets have more inventory than they have had in the past 10 years,” Gillespie says. “Right now, nationally, there is about 11 months of inventory on the market.” In other words, it’s estimated that it would take almost a year to sell all listed homes, assuming no new listings came on the market.

Dollar Sense

That’s a lot of property for sale. Just a few years ago, buyers were lucky to find a couple of options that came close to meeting their needs. And they also felt enormous pressure to make a fast decision before another buyer came in offering still more. Now, buyers can shop at a leisurely pace and find plenty to choose from.

Extraordinary buys also are beckoning second-home shoppers from the United States to look in Mexico, Central America, and the Caribbean. The weakness of the dollar is offset by the fact that, for the most part, these economies are tied to the dollar. In Panama, for instance, the U.S. dollar is the local currency.

“If you are shopping for a second home with the idea that in five or 15 years it will become your permanent retirement home, you are in the ideal position,” says Craig Venezia, author of Buying a Second Home: Income, Getaway or Retirement (Nolo, 2007). Note that he’s talking about the buyer who plans to hold on to the property. People buying to flip or hoping for short-term profits from rental income may be harboring unrealistic expectations, Venezia says, but the strong buyer who purchases quality property at a good price in a prime location is making the right decision. “For buyers who have 20 percent cash to put down and who have good credit, this really is an ideal time to buy.”

“It’s definitely a good time to buy if you’re purchasing to use because you won’t be buying at peak,” says James Chung, president of the real estate research firm Reach Advisors. Communities where people primarily bought as investments are suffering, he explains, but places where people bought with a plan to use and enjoy the property are holding their own.

Where the Buys Are

So what’s selling? One size does not fit all — and surprises abound in the second-home marketplace, both south of the border and within the United States. Here are some of the trends:

Downtown dwelling. “We’re seeing strong interest in downtown, vertical living,” says Richard Swerdlow, CEO of Condo.com, which bills itself as the world’s largest condominium marketplace. Steven Kleber, a principal with Kleber & Associates, a real estate marketing firm in Atlanta, Ga., has even coined the term “ruppie” — retired urban professional — to describe the movement of upscale retirees to big cities. Many pre-retirees — empty-nesters fleeing suburbia — are also pouring into cities. What draws them is the convenience of living in a compact urban area, particularly a place with good public transit. There are also the restaurants, excellent health care, and cultural options like museums, theater, and music.

Which cities are hot? Not surprisingly, places like New York, Chicago, and Los Angeles are popular. But the trend has also come to Atlanta. That’s due in part to great weather and a multicultural community, says Tom Eubanks, editor in chief of LoftLife Magazine, a publication geared toward the new urban dwellers. Another city winning attention is San Antonio, says SecondSpace’s Khanuj. Good weather year-round draws second-home shoppers to this Texas town, which happens to be the seventh largest U.S. city.

Movement toward Mexico. “Nearly one million Americans own second homes in Mexico,” says Khanuj, and most in the real estate field are betting that the number of American retirees in Mexico will only head straight up.

“Many boomers are planning to retire to their Mexican second homes,” says Tom Kelly,author of Cashing In on a Second Home in Mexico: How to Buy, Sell and Profit from Property South of the Border.Which locations? “It’s all about air lift.” What he means is that the Mexican towns that are easy to get to via international flights — for instance, Canc
xn, San Miguel de Allende, and most of Baja California — are the ones that will appeal to U.S. baby boomers. What draws Americans is not only the slower, more tranquil pace of life but also the fact that the dollar stretches far. “Mexico offers a much less expensive alternative for second-home buyers seeking sun,” adds Kelly, a former longtime real estate editor with the Seattle Times who now writes a nationally syndicated column. Everything — including health care, gasoline, groceries, and household help — is cheaper in Mexico, Kelly says, and that keeps drawing buyers south of the border.

A perch in Panama.“Panama is becoming very, very hot,” says Swerdlow. That is driven by three factors: price (often under $200 per square foot, according to Swerdlow, who adds that prices are two to four times higher in Florida and California); easy access to the United States (a three-hour flight gets you to Miami from Panama City); and no property taxes. Revenue from the Panama Canal is so robust that the government waives property taxes for 20 years after purchase, and there is no tax on foreign-earned income. The upshot is that as prices have soared in neighboring Costa Rica, bargain-minded home buyers in search of sea and a temperate climate are checking out Panama.

Case in point: Royal Decameron, about 90 minutes from the international airport, on the Pacific side of Panama. Four-bedroom villas sell for around $600,000 (smaller homes go for as little as $350,000). “We’re all about our laid-back lifestyle,” says Marta Molina Seal, a vice president with Caribbean Property Group, a development company. The appeal of this beachfront community is potent: about 40 percent of home buyers come from North America, according to Seal, and what attracts them is life in a truly multicultural community with a picture-book location in the tropics.

Ohio express. “You’d be amazed at what $350,000 will buy you in Shaker Heights,” says Earl Leiken, mayor of the Ohio town just a few miles outside Cleveland. A pioneering planned community — much of the housing dates to the 1920s — Shaker Heights “offers a climate as good as any,” according to Leiken, who quickly adds that he means April through December. Winter does get rugged in this Great Lakes town, he admits. “Many of our residents own a winter home elsewhere, and that way they get perfect weather year-round.”

Shaker Heights’ other draw: community. Leiken says residents frequently have block parties and also come together to support the local arts. In addition, he notes, tickets to professional sports in nearby Cleveland (home of the Indians, Browns, and Cavaliers) are widely available (unlike, say, Yankees tickets in New York or Redskins tickets in Washington, D.C.). Human scale predominates in Shaker Heights, and Leiken says that has plenty of appeal for second-home shoppers and retirees. There’s no other town quite like Shaker Heights, and nowadays, that kind of uniqueness is a powerful draw.

Lifestyle plus location. You’ve always heard that the three big factors in real estate are location, location, location. But that notion is being turned around by baby boomers who are shopping for second homes or retirement homes. That’s because these buyers are shopping for lifestyle more than for a particular location, says Paul Boomsma, president of Luxury Portfolio Fine Property Collection, based in Chicago.

“Second-home buyers are buying lifestyle,” agrees Coldwell Banker’s Gillespie. What that means is that some are keen for golf, for instance, while others want sun and surf, and still others seek urbanity and culture.

Rauert Peters, COO of Engel & Völkers, a leading European luxury real estate firm that has expanded into the U.S. market, elaborates. A ski-oriented buyer, for instance, might look at properties in Vail, Vermont, and Switzerland. “These buyers are making lifestyle decisions,” says Peters.

Another driver, according to Boomsma, is that today’s affluent buyer is looking for a home that can become a multigenerational family retreat, similar to the Kennedy compound in Hyannis Port, Mass., or the Bush compound in Kennebunkport, Maine, to point to two celebrated examples. What this class of buyer wants is a property so attractive that 10 years from now, when the children are married and perhaps there are grandchildren, invitations to gather for vacations and holidays will be accepted in an instant because the property is that compelling. “Those houses sell,” Boomsma says.

Also hot — even in a down market — are one-of-a-kind trophy properties (think a waterfront home in the Hamptons or Malibu), particularly those that are well priced. Homes in this category that are priced to move will, says Peters. He says there still are buyers ready to pounce on trophy properties — they are just wiser today.

Boomer Times Ahead

All this leads to the question: when will the real estate market turn around? The best advice is to run from anybody who says they know. But Dan Luczkow, a vice president at OptHome.com, a real estate portal, points to one immutable fact about the second/retirement-home marketplace: “Baby boomers will be driving this niche for the next 20 to 30 years.” The Census Bureau says 78 million boomers (born between 1946 and 1964) were alive in July 2005, and 7,918 people reached age 60 every day in 2006. That’s one loud and populous march toward retirement. And brisk economy or laggard, the reality remains that a lot of homes will get bought by boomers. “This alone will drive housing over the next quarter century,” Luczkow says.

Understand, too, that some markets have already turned around. “Housing is like the weather,” says Coldwell Banker’s Gillespie. “Both are local.” Knowing it will snow tonight in Minneapolis means nothing if you are flying to Houston. And knowing that one housing market is sagging means absolutely nothing about another market that may be entering a robust rebound. “You really can’t time a housing turnaround,” warns Gillespie.

The bottom line: “If you are buying to improve your lifestyle,” says Paul Boomsma, “now definitely could be a very smart time to buy.”

The Hard Facts

Speculation and hopes aside, what are the facts about high-end real estate today? One place to look for answers is the Luxury Institute, which recently released the findings of its 2008 survey of 800 well-heeled Americans — defined as those earning $300,000 or more a year or having a net worth above $5 million.

This is a property-owning cohort: 51 percent already own two or more properties, and 22 percent own three or more. And they’re hungry for more. The good news is that 24 percent are considering buying property, with an anticipated median purchase price of $546,000. Forty-two percent of that group say low prices prompted them to consider a purchase.

Where are they shopping? States triggering the most buyer interest are California and Florida; New York is third, followed closely by Texas. Don’t read too much into that hierarchy, though. Those also are the nation’s four most populous states.

Are the rich buying abroad? According to the Luxury Institute, 2 percent are, and that’s equal to the number of buyers looking in Arizona, Colorado, Nevada, and South Carolina. “Buyers are negotiating extremely hard,” adds Milton Pedraza, CEO of the Luxury Institute. “But property is selling. Sellers just have to expect to negotiate.” — R.M.