Real-Estate Porn.(bargain housing in Croatia)(Brief Article)(Statistical Data Included)

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 ...