By Fred Hibbert and George Monaco

Who hasn’t dreamed of owning a home away from home, a cozy little vacation spot where you can escape the city life and relax in the midst of mountain woods or breathtaking ocean scenery?

Alas, soaring home prices fueled by the booming stock market in recent years have kept many people from realizing their vacation-home dreams. But now the time may be right for buyers sitting on the sidelines to finally get that second home.

With the real estate market coming back to earth, prices for homes in the Lake Tahoe and Monterey areas have leveled off and inventory has started climbing again. In fact, Tahoe hasn’t seen such a large selection of homes in more than two years.

Although most areas have seen median prices inch up in recent months, it’s nothing like the steep climbs of 1999 and 2000. And some real estate experts foresee prices even dropping a bit in the high-end neighborhoods in the months ahead.

For the first time in a long while, buyers will have the selection and time they need to shop around for the vacation home of their dreams without worrying about getting into bidding wars with other potential buyers.

Besides the slowing prices and growing inventory, there are other reasons to look into a second home now. Purchasing a second home can be a diversifying investment to help balance out your stock portfolio. Buying a second home is more affordable now as we are seeing the lowest interest rates for mortgages in years, and they are continuing to drop. Don’t forget there are also tax benefits for most second-home owners (the rules are complicated, so talk to your tax advisor to see where you fit in). Finally, if history is any indication, California real estate values have always held up quite well, making homes - and second homes - a wise long-term investment.

So what should you do if you desire that home away from home?

Find a good agent who really knows the area and its neighborhoods and can help you find the best value and the perfect match. If you’ve already worked with an agent locally, ask for a referral.

Although prices haven’t dropped in most vacation areas, there is a great selection of homes to choose from. When buying a home, consider location, scenic views, proximity to area attractions and any unique amenities, as these affect appreciation. Without the wild frenzy of bidders and multiple offers, you can now take your time to find the right home at the right price - with no pressure. As a buyer, you are back on a level playing field with the sellers. Take advantage of your agent and their negotiating skills.

If you want to sell your home, list with a realtor who specializes in your area, who knows the competition and going prices for homes in your area. Remember to be realistic: The market is not the same as it was in 1999 and 2000, and your expectations need to be in line with today’s conditions. Your realtor will help you determine a competitive price for your home. It is important that your home is in good condition and staged appropriately. It is more appealing to buyers when it is repainted, landscaped and cleared of any clutter.

For the best guidance on buying or selling a vacation home, have a one-on-one discussion with an experienced real estate professional.

Fred Hibbert and George Monaco are managers of Coldwell Banker Northern California’s Los Altos offices. Both oversee a talented team of over 50 real estate professionals in the Los Altos area. Their offices are located at 110 First St. and 496 First St., Suite 100, and they can be reached at 917-4248 and 947-2222 or by e-mail at fhibbert@cbnorcal.com or gmonaco@cbnorcal.com.