Everything You Need To Know
The Cindy Shearin Group
Three years ago, while visiting friends in the wine-producing Languedoc-Roussillon region of southern France, Timothy McDonald decided he wanted what they had: a chance to experience small-town life in what is sometimes described as an unspoiled and more affordable version of Provence. A year later McDonald and his wife, Kathleen Brooker, took a mortgage on their paid-up Seattle home and plunked down $200,000 in cash for a 15th-century former shop house in the remote agricultural village of Azille (pop. 1,100), 90 minutes from the Toulouse airport. The couple, both in their early 60s, plan to spend several months a year there after she retires someday from her job as executive director of Historic Seattle. (McDonald, a semiretired architectural preservationist, already spends a month at a time there.)
While some aging boomers might put a premium on convenience or a place that can accommodate future physical limitations, McDonald and Brooker bought in a town without even a train station and from a contractor whose idea of tasteful renovations included removing the handrail on the narrow staircase of the three-story stone structure. And why not? They’re fit bikers, runners and history buffs who care more about the town’s proximity to Cathar Romanesque sites and enjoying their French, British and Swiss neighbors. “We wanted to have a bigger life, rather than have a bigger home in the U.S., and ironically we found it in a small French town,” says Brooker.
Of course, American billionaires and celebrities have always lived large in Europe. Microsoft cofounder Paul Allen reportedly keeps a staff of 12 at his hilltop villa in St. Jean Cap-Ferrat, along the Côte d’Azur. George Clooney‘s 30-room palazzo on Italy’s Lake Como has starred in many A-list parties.
But a weaker euro, low interest rates and crashing real estate prices in parts of the euro zone are prompting more ordinary American Europhiles to look at buying a piece of the Old World .
What they’re currently finding, says Ronan McMahon, who reports on real estate trends for the International Living website, is that European prices peaked between 2006 and 2008 and are now all over the map. Stratospheric London and Paris prices never fell that much and have headed back up. But an exodus of youth from rural France and Italy has made homes like the one Brooker and McDonald bought somewhat more affordable.
Then there are Europe’s real estate bust areas, which unlike, say, Nevada and Florida haven’t started their comebacks. McMahon’s advice for those areas: Wait until prices have fallen dramatically and be prepared to hold for a while. That makes him bullish on Spain and Ireland but bearish on Portugal’s Algarve and the Greek islands of Crete, Mykonos and Santorini, where prices are down only 30% from their peak. By contrast, along the scenic Ring of Kerry, near McMahon’s Adare, County Limerick, Ireland base, $100,000 can get you a country cottage, a newly built modern home or a building plot with views of the Atlantic. All would have fetched $500,000 at the peak. In Spain deal hunters have been scooping up apartments in failed developments from banks selling for one-third of the 2007?08 list price. A two-bedroom, two-bath apartment on the Costa del Sol with distant views (on a clear day) of the ocean less than a mile away can be had for $100,000.
Beyond the state of the real estate market, consider how a purchase fits into your overall finances and whether you’re really game for the practical, legal and personal challenges of maintaining a home in another country and possibly retiring there. Visit the area you’re considering multiple times, rent a place (rather than staying in a hotel), shop for food, do laundry and get the full residential experience, good and bad. Ask yourself what you’re looking for: a base for travel or a charming destination? A primary or second home? Or maybe just a vacation place that you’ll also rent out?
Two years ago Ray Stewart, a 63-year-old, Europe-based American telecom exec, bought a 3,300-square-foot apartment in central Brussels as part of his “lifestyle plan.” After Stewart retires in a year or so, he and his wife, Barbara Reno, 66, a former not-for-profit executive, hope to serve on corporate and charity boards, dividing their time between a house in the U.S. and Europe, with Brussels as a base. The city of 1.1 million is 80 minutes by train from Paris, two hours from London and a lot less expensive to buy in than either. Sure, the rent a Brussels flat commands is less, too, but Stewart doesn’t plan to rent it out. He acquired two units and merged them into a three-bedroom, three-and-a-half-bath apartment to accommodate visits from the couple’s three adult sons from prior marriages.