Real-Estate Porn

First came the war correspondents, quietly buying little villas on the rugged coasts and islands of Dalmatia. They passed through the area often enough, on the way to Bosnia, Croatia or Kosovo, and watched as beachfront property values plummeted during the war. Then came the international agencies, the U.N. and European staffers who delivered aid to refugees and later oversaw shaky peace deals. It was clear they would be staying a long time, and living in places like Skopje and Pristina that weren't the most pleasant, so why not a holiday home that was?

Many of these pioneers scattered among some of the more than thousand Dalmatian islands in splendid isolation. Others became the nuclei of what are still very small expatriate communities. Frances Best, a German freelancer who previously worked for a television network out of Cologne, was a relative latecomer to the island of Korcula, the reputed birthplace of Marco Polo. Some 20 American families and even more U.N. and European ones had preceded her to the island when she bid on her home in 1998. Even so, rumor has it that she spent only $50,000 for a secluded beachfront stone and oak house that for centuries had been an olive-oil mill. With some four bedrooms, and three or four terraces shaded by thick old vines, the house sits on a sandy beach--a relative rarity on the Balkan coasts. "I never thought I would live someplace this wonderful," she says, watching a blood-red moon rise over the next island just after sunset. In the morning she gets German, French, Italian and English newspapers down at the port.

You don't have to be a Microsoft executive to buy into this enviable lifestyle--though several have, especially in tony Korcula, a 13th-century Venetian walled town well connected by ferries to Split and Dubrovnik. "More and more foreigners seem interested in buying property here," said Aljosa Milat, owner of the Marco Polo travel agency, who has helped put several of the buyers in touch with sellers. As on most Adriatic islands, Korcula's year-round population emigrated a generation ago, leaving plenty of empty housing around, even if not all are for sale. Some are homes owned by Serbs forced to flee during the war. Best got hers so cheaply for that reason; locals had allowed vandals to loot and gut it.

Prices are going up, but bargains are still to be had, especially considering many such properties would be museums anywhere else. While $1,400 per square meter (about $135 per square foot) may sound steep, that works out to $70,000 for one of the smaller houses on Korcula, inside massive walls but only a short stroll from the sea. Who knows? Perhaps the infant Marco Polo might have been burped there, before leaving for Venice in early childhood.

Houses in Dubrovnik's old town are two or even three times more expensive. But there are many other places to find an affordable home by the Adriatic. Real-estate agent Jasminka Biliskov in Kastel Stari, a coastal village near Split, says a buyer could still find a pied-a-terre in the ancient city of Trogir, much celebrated for its beauty, for $50,000. You might have to walk a hundred meters or so to the nearest beach or marina, and the international airport is maybe 20 minutes away--during rush hour. Foreigners must obtain special permission to buy in Croatia, but she says she's never had a Western European or American client turned down.

There are commercial opportunities, as well. Farther down the coast, at the popular beach of Primosten, Biliskov is trying to sell a new complex of Mediterranean-style garden apartments, with a private sandy beach--50 beds in all for about $1.3 million. Rare properties--old empire hotels or villas that could grace Beverly Hills--are already being snapped up. She thinks the market is sluggish right now, low prices or not, because of the war in Macedonia, even though that country shares no border with Croatia. "People confuse anything in former Yugoslavia with Croatia," she says. "It's calm and stable here now. But the smallest little thing in the news, and... real estate is very sensitive to that." Which, as they say, creates buying opportunities for those with a little cash to risk and an appetite for adventure.

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