The 2025 Israel-Iran War: What It Means for American Buyers in the Israeli Real Estate Market

We’ve all been watching the headlines with growing concern. What was once a distant threat is now reality: Israel is at war with Iran. The snake is finally being attacked. Missile barrages, nationwide alerts, and a regional escalation once thought unthinkable are now part of daily life. As of last Thursday, Israel is facing a full-scale conflict with Iran, and American Jews who’ve been thinking about buying real estate in Israel are asking the obvious question:

"Does it still make sense to buy property in Israel right now?"

The short answer? Yes — if history is any guide. Here’s why.

What the Past Tells Us: 30 Years of Conflict, and a Resilient Market

Israel is no stranger to conflict. Over the past three decades, it has endured:

• The Second Intifada (2000–2005)
• The Second Lebanon War (2006)
• Three major Gaza conflicts (2008–2009, 2012, 2014)
• Ongoing rocket threats in the north and south
• The October 7, 2023, attacks and ensuing Gaza war
• And now, a direct confrontation with Iran in 2025

And yet, through all of this, the Israeli real estate market has not only survived, but it has also thrived. Each time conflict arises, we tend to see a familiar and remarkably consistent pattern. There’s usually a brief slowdown in transaction volume as uncertainty sets in and people wait to see how things unfold. In some cases, there may be slight price dips, although these are typically modest and short-lived. But what follows is the most telling: a strong recovery, often marked by increased demand — particularly from overseas buyers — and prices that rise even higher than before. The resilience of the market has been repeatedly tested, and time after time, it has bounced back stronger.

Examples:

• During the Second Intifada, transaction volume dropped — but prices rebounded quickly by 2006, and a boom followed in central Israel.
• During the Second Lebanon War, markets in Tel Aviv and Jerusalem remained stable. Construction paused in the north but resumed rapidly.
• After Operation Protective Edge in 2014, Anglo demand surged just months later, particularly in Jerusalem, Ramat Beit Shemesh, and Modi’in.
• And after October 7, 2023? Many feared collapse. Instead, demand from American Jews spiked, driven by a mix of ideology, security concerns, and rising antisemitism abroad.

Bottom line: Wars may pause real estate, but in Israel, they don’t break it. If anything,

they reveal just how emotionally and economically resilient this market really is. 

What’s Different in 2025 — and Why Buyers Are Still Moving Forward

The war of 2025 feels different — and that’s because it is. This isn’t a skirmish on the border or a flare-up in Gaza. It’s a direct military conflict with Iran, with Hezbollah now fully engaged from the north, and Israel’s air defense systems under immense strain across the country. The scope and scale are far greater than what Israelis — and the global Jewish community — have experienced in decades. And yet, rather than backing away, many American buyers are accelerating their plans. They're not waiting for things to “calm down.” They’re acting with intention and urgency.

Why? First, there’s been a dramatic shift in how many in the diaspora view Israel. For years, owning property in Israel was about vacations, symbolism, or aliyah someday. Now, for many families, it’s about security, legacy, and having a lifeline — a place to go if things deteriorate elsewhere. Second, inventory is getting tighter. Permitting delays and construction slowdowns are already being felt. Buyers who understand the long-term nature of the market are choosing to act now, while supply is still available and before inevitable shortages push prices higher. Financially, the shekel has remained stable. For Americans, the strong U.S. dollar continues to provide significant buying power, making Israeli real estate more accessible, even in the face of global uncertainty. And despite the war, we do not expect prices to drop. In fact, in Anglo-heavy markets like Jerusalem, Modiin, and parts of Netanya, I believe prices will stay firm, and in some cases, they will continue to rise. The resilience of these markets, supported by both emotional ties and real demand, is proving itself once again in real time.

Which Areas Are Stable Right Now?

Naturally, some areas near conflict zones have slowed, notably the northern border (Galilee, Kiryat Shmona) and parts of the south. But these were never the primary targets for most U.S. buyers.

Instead, demand is likely to rise in:

Jerusalem (Rechavia, Talbiyah, German Colony, Arnona)

Netanya (especially Ir Yamim and other Anglo-friendly areas)

Modi’in (central, growing, and well-connected)

Tel Aviv (select neighborhoods with solid infrastructure and demand)

Deals will be closing. New clients have been entering the market. Despite the war, the machinery of the market is still turning.

What Happens to Prices After War?

If you're hoping to “buy the dip,” you may be waiting a long time. The Israeli real estate market, based on past examples, doesn’t behave that way. Historically, any short-term hesitation is quickly replaced by renewed activity and medium-term price surges. Foreign buyers, inparticular, often re-enter the market faster than local ones, driven by a combination of emotional connection, opportunity, and long-term vision. Meanwhile, construction delays during wartime reduce the pace of new housing supply, which only adds upward pressure on prices once demand resumes. Instead of crashing, the market tends to recalibrate — and then grow. Just like after October 7th 2023, the market may breathe, but it doesn’t collapse.

2025: When “Someday” Became “Now”

This war has changed how people think. More and more American Jews are saying:

“We’ve been thinking about it for years. This made us realize — it’s time.”

For some, that means buying a future aliyah home.

For others, it’s a second apartment — or an anchor for their children.

For many, it’s a statement of identity and continuity.

The war has made the pull toward Israel stronger, not weaker.

Should You Wait — or Act?

That depends on your perspective. If you're hoping for a quick flip or looking to score a distressed deal, this probably isn't the moment. The Israeli market rarely offers deep discounts, even during times of conflict, and short-term speculation is especially risky in uncertain periods. But if your goals are long-term — if you're planning for aliyah in the coming years, thinking about your family's legacy, seeking a secure and meaningful investment, or simply wanting a footholdin the Jewish homeland — then now may be exactly the right time. This moment, despite its challenges, offers clarity. It's helping many buyers move from “someday” to “now.”

Then this moment is not just relevant — it’s clarifying.

Legacy Doesn’t Wait for Peace

War forces clarity. It reshapes our values and sharpens our priorities.

And for thousands of American Jews, it’s reaffirmed a truth they already knew:

Israel isn’t just a place on a map. It’s part of their story.

Buying real estate here isn’t just a financial decision. It’s emotional. It’s ideological. It’s generational.

And even now — especially now — that desire hasn’t disappeared. If anything, it’s only grown stronger.

 

Disclaimer: This article is not data-based but rather based on Ben Levene's personal market experience and opinions. No decisions should be made without thorough due diligence and professional financial advice.

Ben Levene, CEO of CapitIL Real Estate, brings over 15 years of expertise in the Jerusalem real estate market. For inquiries, reach out to him at [email protected].