Neil; had a drink with a local real estate agent last night.
Answers to your questions;
1 Downturn has had no discernible effect here in Maceio.
2 Prices are going up, but not by much, only Italians are buying, and they generally buy in Italian-owned and financed condominiums.
3 No, prices are not inflated for foreign buyers, as far as he knows.
4 Most buyers here are Brazilian, and therefore knowledgeable about buying and selling property. Never had any problems myself, or heard of any.
5 He said he knew a simple but pleasant beach house, 1o0m back from the beach in Paripuera, 25kms north of Maceio, for 40,000R. We´ve bought land in a new condo, Atlantis, 730sqm, for 143,000R, great view, a luxury (unfinished but well advanced) development. There are still some plots left for around 100,000R. No idea if that is comparable to elsewhere in the NE.