Some say the real estate market will decline, while other say the forecast looks good and that there is no reason for the prices to drop.

How has the global financial crisis affected the Israeli real estate market? As a real estate agent servicing Jerusalem, I’ve been asked this question many times. Have prices peaked? Will this rising market continue to climb? Or will prices drop drastically?

So far it’s hard to tell. Experts offer contradictory predictions. Some say the real estate market will decline, while other say the forecast looks good and that there is no reason for the prices to drop. From my familiarity with the current market, prices in most Jerusalem neighborhoods are not going down; however neighborhoods that relied on the foreign market such as Rehavia may indeed drop.    

However, even in those neighborhoods don’t expect drastic reductions. Here are two examples to illustrate current market trends. A two bedroom apartment In Ramat Eshkol that would have been sold for NIS 1,150,000 a few months ago now sells for NIS 1,100,000. A friend of mine who renovated a magnificent 200 meter home in the upscale Katamon/Talbia neighborhood brought his asking price down from $2,300,000 to under $2,000,000.

So if you are looking in the neighborhoods of Ramat Eshkol, Rechavia, Katamon, Talbia, and the German Colony, you may be able to get something cheaper now than if you had you made the purchase last summer.

As for other areas of the city, we still see upwards or at least stable trends. In Gilo prices are rising. The same is true for the French Hill and Givat Zev. Housing prices in Ramot and Har Nof seem to be stable.

So does that mean you should wait to buy or buy now?

There is no definitive answer, but I suggest if you see a second hand property that you really like, go for it it. There’s no telling if prices will go down and you may lose the apartment you like. However, if you want to buy into a new luxury development, particularly in exclusive areas and the city center, and you’re in no rush, you may want to wait. There is surplus of luxury developments aimed at the foreign market and with the state of the world economy, they are not selling like sufganuiot (doughnuts) during Chanuka. But if you are looking to buy into a new development that is not in an exclusive neighborhood or city center, don’t hesitate because I expect prices to rise.                        

                  

Baruch Finkelstein is an owner/broker of Remax Center in Jerusalem. The office is in the shopping center of Ramot and Baruch has agents that service all of Jerusalem.

cell: 972-545-251-219

office:
972-2-586-9980

[email protected]

www.remax-israel.com/center