I would like to answer my own question a year after asking it:-)

We are starting to see a resurgence of second home buyers in North Coastal San Diego County. Many anticipate retirement here, and feel that the best timing for good buys might be now--rather than later. These buyers tend to be affluent and have a history of making good financial decisions.

Blue chip real estate will always attract buyers....

I just read an article about that subject and it said that surprisingly the market slowdown has not had a huge effect on the second home market. Now that may change in the furture. I know a few agents in Palm Springs who are telling me that the market is very slow there.

Here, In the Hamptons, on the East End of Long Island, we have seen a reuction in the investor segment of the second home market. We are still seeing pretty strong demand for the true user. Many investors seem to be chasing returns in the financial markets with the Dow hitting repeated highs and the bubble-hawkers now droning about sub-prime.

I believe that the fed will lowers interest rates this fall and that will both help the sub-prime borrower as well as spark investor interest in real estate, which, if chosen correctly, will continue to show great returns.

Great question. Why'll i do believe that the second home market is cooling just as the rest of the RE markets. In my opinion, most of the California second home markets will be the first areas to see improvement in the coming years as homeowners move away from metropolitan areas. In particular this will effect the technology hubs, due to the rise in employers allowing their employees to telecommute. Anyone have a rebuttal?