Jerusalem Market Update February 2023
“Israel real estate market sees decrease in demand!"
"Israel's housing market slow as new build sales decline!"
Raise your hand if you have read an article like this in the past month. Don’t shoot the messenger, but these headlines do not accurately reflect the market in prime areas of Jerusalem.
They are giving a misguided opinion of the market that the majority of you are looking at.
It is important to note that these reports and averages include neighborhoods of Jerusalem that are not attractive to Anglo buyers, such as Malcha, Kiryat Menachem, and Kiryat Yovel, These areas, although lovely, are not commonly inhabited by Anglos.
The articles are also commonly referring to all cities in Israel, and in my opinion, most Israeli cities do not have the same kind of nearly all-anglo demand in prime areas.
Do Not Believe Everything You Read
I must stress that I have never been busier, and the demand for my services has only increased.
I have not noticed a significant sign of a decrease in prices. It could, in my opinion, be a mistake to assume that prices are softening in these prime areas.
Waiting for Jerusalem real estate prices to drop personally confuses me.
A lot of people who have talked to me about potential drops have been waiting for drops for years.
Even during Covid prices did not drop or freeze - they went up significantly!
The current market offers plenty of desirable properties that sell quickly. There seems to be no shortage of buyers to take advantage of these opportunities.
The strong USD is providing a 10-15% increase in purchasing power, which makes it a prime time to invest in the market, despite perceived high prices. At the beginning of 2022, the USD was valued at 3.1 and as of February 9th, 2023, it is around 3.5.
A Seller’s Market
Even if I am wrong, and the prime areas of the Jerusalem market drop 5 to 10 percent or more - most homeowners will not sell and will sit and wait.
Additionally, developers will build less, which will again decrease supply, which is another reason not to wait. If prices officially drop, but you cannot buy what you are looking for, waiting for the drop is pointless.
If the market had a high supply and sellers were under pressure to sell, then it would be reasonable to expect prices to decrease.
However, this is not the case in Israel, as the country's housing market is not characterized by a need for quick sales. Most property owners are not over-leveraged due to strict bank of Israel laws on lending.
You Are Not The Only One
In every price range, there are generally only a few apartments available that meet your criteria and are reasonably priced. You are not alone in your search, as many buyers like you seek the same thing. At each price range, there is a line of interested buyers competing for the limited options.
Here is an example of a delightful couple from the Five Towns that I assisted in their search for the perfect property.
They are highly motivated to find an apartment that meets their needs and expectations. Initially, they had a budget of 6.5 million shekel for a spacious apartment with 3 bedrooms, a study, and all the features they desire, such as a sukkah balcony, a Shabbat elevator, parking, and storage.
However, despite finding several apartments that nearly fit their criteria, they were disappointed to discover that even these properties required significant compromises and were not feasible within their budget, despite what the real estate listings they had been reading had indicated.
As a result, they decided to increase their budget to around 11 million shekel and are now making greater progress within a wider range of highly suitable options.
This situation highlights the importance of being careful when reading articles and comparative listings that do not pertain specifically to prime areas of Jerusalem.
They can create unrealistic expectations of the real estate market and lead to disappointment. That is why it is essential to work with an expert such as myself, who can provide you with a clear and accurate understanding of what the market is really like.
In conclusion, the real estate market in prime areas of Jerusalem, such as Rechavia, Talbiyeh, Baka, German Colony, Old Katamon, and Arnona, has not shown a significant decline in prices despite prices dropping in other areas of the country.
The Jerusalem prime area market is currently robust, with extremely limited supply options and high demand. Additionally, the strong USD provides a significant advantage in purchasing power.
It is important to act now and not miss out on opportunities as the market is highly competitive, with many buyers seeking the same properties.
I personally do not suggest waiting for prices to drop, as this is not likely to occur in the prime areas of Jerusalem and even if prices do drop I am not convinced it will help you find a tick-all-boxes apartment.
Do not be that person saying “if only I bought 5 years ago.”
(This article is not data-based but rather based on CapitIL’s CEO & Co-Founder Ben Levene’s personal market experience and opinions. No decisions should be made without thorough due diligence and professional financial advice.)