Where the Living Is Cheap

When Sue Evans and her husband were looking for a vacation home last year, the British couple bypassed Europe's celebrated, sun-dappled beaches in favor of more distant shores. "Portugal was too expensive and Spain wasn't warm enough," says Evans. In July, they purchased a four-bedroom, three-bath villa in Orlando, Florida. "It's in a gated resort not far from Disney, the weather is warm, the language is the same and the cost of living is low," Evans explains. The weak dollar, she says, "was a bonus."

As the dollar lingers at record lows, more and more Europeans are putting their pounds and euros into stateside getaways, shunning Marbella and Cyprus in favor of the Hamptons on New York's Long Island and Miami's South Beach. "Since August 2003, as the euro and the pound have climbed, sales have gone through the roof," says Les Brookes, managing director of Orlandovillas.co.uk, a Staffordshire-based company that guides international buyers through the overseas purchasing process. "We are receiving over 200 inquiries a week. Because the pound is so strong right now and the dollar is very weak, the British investor has lots of dollars to spend. Moreover, prices in Spain have gone up dramatically, so Spain is no longer as attractive."

Real-estate agents on the U.S. side of the pond have also taken note of the trend--particularly in Florida. "We have always had a large European base, but the numbers are definitely increasing," said Kim Kirschner, president of Kirschner Realty International in Hollywood, Florida. "In the past nine months, we have seen purchases rise about 20 percent." Prices generally fall between $300,000 and $600,000--although the exchange rate is making even posher places more alluring. "We have had an unusually busy February," says Alice Bell, brokerage manager at Sotheby's International Realty office in East Hampton. "Our European clients have upped the ante on their purchases. In fact, we just sold a $12 million house to a British gentleman."

Properties purchased by foreigners tend to do double duty as vacation villas and investments, with most homes rented out during the off- season. While no one can predict how long the dollar will languish, many new European homeowners are anticipating its recovery in hope of making a profit. "It was the logical thing to do," says Richard Peel, a London-based management consultant, about his recent purchase of three Florida vacation properties. "When looking at it from an investment point of view, the low dollar made more sense. It is not going to go down any further. I made the purchase two months ago and the properties have already appreciated." Although two of the properties are chiefly investments, Peel is considering keeping the third as a vacation home for himself and his children. And where is this new getaway? "Miami," says Peel. "Miami is very attractive." His neighbors from Ireland, France and Germany appear to agree.