Tips for retirement home buyers

(Linda Stern is a freelance writer. Any opinions in the column are solely those of Ms. Stern. You can e-mail her at lindastern@aol.com.)

By Linda Stern

WASHINGTON (Reuters) - Real estate prices have taken a tumble in the most favored vacation and retirement home markets.

South Florida? Prices are down 27 percent from a year ago, according to the Standard & Poor's Case-Shiller home price index. Hawaii? Big Island prices are off 18 percent. Vegas, Phoenix, Southern California? Off more than a 25 percent.

That's mighty tempting to folks who are scouting for that sunny retirement home or always wanted a weekend getaway. To add to the temptations, there are fat inventories in many of those markets: lots of houses from which to choose, and sales-minded owners getting antsier by the minute.

The icing on the cake comes from continued low mortgage rates, with 30-year fixed rate loans now at 6.3 percent, according to bankrate.com.

So it's definitely a good time to go shopping. But don't feel like you have to rush: Some housing analysts see prices falling further, and even those who don't aren't expecting any big price jumps soon. And today's prices may be bargains by last year's standards, but they are still significant compared to vacation home prices five years ago.

Take your time, and keep these issues in mind while enjoying all those open houses.

-- Where do you want to be? If you're looking for a vacation home, calculate how much it will cost you in gas and hours on the road to get there for a weekend. You may want to limit your hunt to places closer to home. If you are shopping for a second home you intend to retire to, that raises a whole other set of criteria to consider -- including but not limited to items like proximity to airports and hospitals, local tax treatment of pensions and more. Remember, the three key parts of a real estate deal remain location, location, location.