For what it is worth, I feel that Spain will come back to the front, once the economic situation is more settled.
Right now, the market has slowed mainly at the bottom end. Let´s not forget that this is not just due to the credit crunch, or perhaps inflated prices in some areas, but cheaper emerging markets.
As Mark pointed out, I too feel the attraction of these will wain, save for Morroco perhaps, which has potential. Marbella, once some legal issues are put to bed, has the best infrastructure of any of the coastal regions of spain, those that you look for holiday homes in. It also contains the highest quality build, and the most expensive properties. All this wealth will not dissappear, and the attraction is still here.
It will take more time, perhaps another 1-2 years at least, however I am confident that the Costa Del Sol at least will pick up. Areas like Almeria, I feel will not, nor the southern Costa Blanca areas around Murica, Alicante, La Zenia. There is simply too much product there.
Well, thatñs what I think, anyway