Prices for luxury second-home markets are falling out of the stratosphere–and attracting buyers who were previously priced out of the market.

Prices in the Caribbean have dropped by $500,000 and European retreats in Spain, Malta, and Portugal are down 30 percent, says Lucy Russell, managing director of Quintessentially Estates.

“The second-home market has suffered considerably,” says Marc Cohen, director of Ledbury Research, the London-based luxury consultancy.

He says active buyers have changed from the typical 65-year-old retiree who has sold his business or retired from a high-salaried job to a younger person who sees opportunity in declining markets.

“Those who need to sell will do so for substantially less than they would have six months ago,” says Charles Weston-Baker, managing director of Savills, U-K real estate services provider.

Source: Newsweek International, Ginanne Brownell (01/12/09)