On a point overlooking Galloway Creek, Joe and Rosalie Hession savor sunsets from the top floor of their new, round, hurricane-resistant house.

Up the road, William and Janice Norris are still living in a cramped, government-issued trailer. But they draw comfort knowing that they will move into a Cape Cod, complete with hardwood floors and a stone fireplace, by Christmas.

And on Bay Drive, residents and sightseers ride by just to gawk at a home rising on what once was four individual lots along the Chesapeake Bay.

Two years after Tropical Storm Isabel ravaged eastern Baltimore County, the rebuilding is on in earnest on the Bowleys Quarters peninsula. Longtime residents are building new homes to replace the old ones damaged beyond repair. And newcomers, lured by the tranquillity of life on the water, are buying lots and building their dream homes.

Isabel destroyed 210 houses in Bowleys Quarters and caused major damage to 632 others. Other waterfront areas in the county, such as Millers Island, also sustained damage and are working toward recovery. In Bowleys Quarters, more than 190 new individual homes have been built or are under construction, county figures show.

Seven homes in Bowleys Quarters are on the market for $1 million or more, according to a real estate database.

"The waterfront in Baltimore County is exploding with nothing but growth," said Fred West, vice president for consumer loans at Provident Bank and a resident of nearby Chase.

Bowleys Quarters is a quiet enclave of about 6,000 residents. More than a dozen marinas are on the peninsula, and, before Isabel, the community had scores of "shore shacks" and cottages, some of which were rented to fishermen or owned by middle-class families.

Like much of the county's waterfront, Bowleys Quarters has its own entries in local history. Daniel Bowley, a merchant and sea captain, settled on 2,000 acres around Baltimore in the mid-1700s. According to historical accounts, Bowleys Quarters was used to house the settler's slaves.

Eventually, it was turned into a game preserve; U.S. presidents and baseball slugger Babe Ruth visited to hunt ducks. Bowleys Quarters was promoted as a vacation spot, and summer homes and small cottages were developed along the waterways in the 1920s. During the halcyon days of Bethlehem Steel, General Motors and other blue-collar plants, Bowleys Quarters was home to high-earning workers and executives.

As the east-side communities of Middle River, Essex and Dundalk became part of the eastern Baltimore County revitalization in the mid-1990s, some longtime Bowleys Quarters residents expressed concerns. They saw upscale homes as a threat, bringing with them higher property taxes that would force them to move. Today, however, a majority see the revitalization as a blessing.

"I am happy these new folks are coming into our area," said Nancy M. Hubers, a former state delegate who has lived in the community 40 years. "We will be losing some of the neighborhood charm with the disappearance of the shore shacks. They are from a bygone era, something we can think about fondly, but not regret the progress we are making."

In 2003, Isabel's winds and floodwaters drove hundreds from their homes. Houses were swept away or heavily damaged.

"What emerged was our resilience, the human spirit, because we had to start over," said Philip Edwards, a Bowleys Quarters homeowner for 20 years.

Through a hodgepodge of strategies - including low-interest loans, flood insurance payments and personal bank accounts - Bowleys Quarters residents began to rebuild their lives. Some built new homes; others repaired their damaged houses. For some, the prospect of going deeply into debt while wrestling insurance companies and government bureaucracies was overwhelming. Some sold their waterfront lots and realized a healthy profit, real estate professionals say.

"Suddenly, property owners on Bowleys Quarters realized that their lots on the water could draw three to five hundred thousand dollars," said Richard Bowerman, an independent appraiser and real estate broker. "And there are buyers willing and able to spend."

One of them is Rudolf Nechay, who paid about $1.2 million for four contiguous 50-foot-wide lots on the bayfront. There, he and his wife, Eva, are building something that the locals have taken to calling the "Taj Mahal." When completed by next spring, their home will be a 5,700-square-foot mansion covered with fieldstone.

Plans for his home include radiant floor heat and wall-to-wall windows facing the water. The land was graded to lift the house and protect it from future floods.

The Hessions' former home was destroyed by Isabel's floods. A garage under the new home puts the two main floors the required 11 feet above the mean low tide.