U.S. home buyers are finding a bright spot as markets stagnate and inflation accelerates: Europe, where a weak euro is luring expats to places like London, Paris, Provence, Tuscany, Lake Como and Lisbon.
As the dollar hovers near parity with the euro and climbs against other currencies, buyers are getting more bang for their buck overseas, the Wall Street Journal reported, citing a report from Knight Frank.
One buyer, Boca Raton interior designer Laetitia Laurent, told the publication that she paid $758,600 for a 460-square foot one-bedroom in the French capital’s affluent eighth arrondissement. That represents a savings of about $80,000 between early this year, when she first saw it, and July, when she closed.
In Capri, Nashville’s Robin Adkins credited the strong dollar for being able to raise her budget to 500,000 euros from 450,000, enough to afford a starter apartment in an exclusive area of the island’s west.
“We get more and more Americans every day,” Teresa Almeida Pinto, a Sotheby’s agent in Portugal, told the outlet.
The British pound, one of the most expensive currencies, has also faltered against the dollar. That means that a four-bedroom apartment in London’s posh Knightsbridge neighborhood that was listed for the equivalent of $16.4 million in January will now set a buyer back $15.13 million in dollar terms. Dollar-based buyers have their best London opportunities since 2008, according to Savills’s Rory McMullen.
As measured by real purchasing power, the euro is even weaker than its parity with the dollar suggests, according to Commerzbank’s Ulrich Leuchtmann. He says the dollar is getting a lift from the fact that the U.S. is a net energy exporter and from Federal Reserve policymaking, while the euro’s weakness is partly due to the war in Ukraine.
It’s not just the strong greenback: Europe’s housing market is cooling faster than in the U.S.
While home prices in the hottest US markets jumped by almost 30 percent between early 2021 and the first quarter, prices in Paris and London rose just 5 percent. In Florence, they dropped by 1.6 percent.
— Cailley LaPara