Swooping In From Overseas

Cheap Dollars, Weak Housing Market Mean Bargains for Foreign Buyers

Stephane Torriglia flew in from Spain about a month ago to check out a rowhouse for sale on Capitol Hill and declared it the "perfect" buy for someone like him, a foreign businessman with euros to invest.

"The idea is we'll convert our euros into dollars," Torriglia said. "We can rent the place out. Maybe in five years or six, the dollar will be strong again and the real estate will gain value. It's an opportunity."

With the U.S. dollar at its weakest level in decades, international buyers are chasing housing bargains here, eager to take advantage of their purchasing power and the declining prices in some of the best-known U.S. cities.

Against that backdrop, the Washington area is luring more than the usual crowd of diplomats. Now that the dollar is cheap, the region's appeal has broadened, enticing international business types and sophisticated investors who find comfort in the area's global reputation as a recession-proof market.

Several area real estate agents said inquiries from abroad have at least doubled since a year ago, mostly from wealthy Europeans and people in such growing economies as India and Russia, where the currencies are gaining against the dollar. Some are making all-cash offers. Even Web sites are seeing a surge in page views from overseas. The international traffic for D.C. area listings was recently up 60 percent year over year on http://Zillow.com, a popular real estate Web site.

"The impact of the weak dollar on foreign demand is one of these market forces that has snuck up on us," said Jonathan J. Miller, chief executive of Miller Samuel, an appraisal company in New York. "It's been gradually gaining momentum, and the demand has accelerated as the fall in the dollar has accelerated."

The math works out nicely for Torriglia, 50, and his wife, Isabel. The euro is now worth about $1.55 -- a record high. On top of that, Torriglia has bargaining power in a down market.

The home he's eyeing belongs to a friend and former Marine who now lives in Spain. Torriglia estimates that it could be worth as much as $1 million. He has offered $800,000 and plans to put 50 percent down if the offer is accepted.

Torriglia has been working with lawyers as well as Dana Scanlon of Keller Williams Metro Realty, an agent he found on the Internet. Scanlon said Torriglia was one of three foreign potential buyers who contacted her in a single week in January. A year ago, the only foreign clients she had were relocating for their jobs, not investors like Torriglia, she said.

"The increase in that kind of buyer has been exponential. I've gone from zero to 10 nibbles since the beginning of the year," said Scanlon, who recently held a class for prospective home buyers at her Rockville office -- in French. "There are many people who seem to be casually looking, while others, like Stephane, are ready to go."

At Washington Fine Properties, interest from international buyers has at least doubled since this time last year, said Tom Anderson, the firm's president. The inquiries have not, however, translated to sales, he said.

The company is working with six embassies eager to upgrade their diplomatic residences. There's also an unusual amount of interest in Virginia's horse country, Anderson said. "We've had people from Germany and the northern part of England actually come out to see the properties."