I was fortunate to enjoy the back end of the "good old days" but in my personal opinion the market will come back round but not as we first knew it which is a pity.
Too many got greedy - and prices rose faster and higher than we could have ever expected, if I were a first time buyer in Spain now - I would just sit tight and wait for the right property to come along, still waiting for sometime yet as properties will continue to fall especially on the Costa Blanca south.
It is not great for us that have already purchased in the last couple of years as we have bought over valued properties and we stand to lose money on our investment, but only time will tell for the market to pick up again.
But yes, it is in a difficult time - which has been experienced before and we came through on the other side, all nationalities will continue to move to Spain, obviously not in the numbers that used to but like you said "lifestyle buyers" and "people retiring" in Spain will always continue - also people wanting to be with their family and friends that have moved here.
As long as we can make it through the poor financial times that the world economy is experiencing the industry should be fine. | 
