As the end of the Jewish year approaches, this is a time to reflect and think about the past year. As I analyze my year as a proud father. It has been an incredible year full of happiness and growth as my son is nearly one-and-a-half years old, and I have seen him grow from a newborn to a happy, crawling baby.
Less important, although quite relevant, is my growth within my career as a Jerusalem real estate broker. This year has been an interesting one with continuous rising in prices and continued confusion from foreign buyers trying to grasp market conditions. Towards the end of this year, we have seen further dilemma at the question of why world affairs, the economy and rising inflation have seemingly not impacted the Jerusalem real estate market. Will we see these effects in this coming year? No one knows for sure.
What I can say, however, is that we are starting to see buyers being a bit more cautious with the deals they are doing and sellers who are desperate coming to the table a bit more than they were in the past year. Prices, in my opinion, are not dropping in large numbers. However, someone asking 10 million shekel for their property which would usually at minimum take 9.9 million shekel, may be more open to negotiations of around 9.5 million shekel. Again, there are always extreme examples of people desperate to sell, but that is not mainstream. Despite this, sellers have recently been looking at the market and the economy realistically and if tight on cash, may decide to make some personal financial decisions and sell their real estate. The average pricing of the market may indeed take a little bit of a knock in the upcoming year, and opportunities for buyers will definitely arise.
Many buyers have been sitting for the past couple of years waiting for a 20% drop in market prices. While this is their right, I personally have not seen the market trending that way. What I do see is that buyers should be positioning themselves to be able to jump in on any opportunity that arises. If you have not started the process, you will not be able to grab good opportunities. I am sure many of you readers are saying to yourselves that you are looking to buy in Israel but… Start getting involved in the process. Start understanding the market.
If you look back historically, when the market drops in terms of quantity of deals, it generally does not take massive hits in pricing. I would advise my clients not to wait for this huge drop in prices, but rather to position themselves in a way that they can jump in on a deal at any time. I really believe that in the upcoming year there will be great opportunities. Having a connection with a broker who will be able to send you these opportunities is crucial.
If you do not know what you want to buy, do not have a lawyer, have cash ready, or a mortgage broker to get a quick approval—know that these things are essential to be in the proper position to purchase real estate in Israel quickly.
As the new year starts, it is time to think realistically about how you plan on jumping into the market and obtaining the best deal.
This past year there were continued transactions in Jerusalem, and many Americans have been purchasing in Katamon, German Colony, Baka, Rechavia and Talbiya. I personally do not think we will see an end to that, and the continuous demand, despite world events, is going to persist. The economy may have an effect on what buyers are looking for, but it has not deterred people from buying. As the economy gets tougher, in a certain way, more people want to purchase real estate in Israel—whether to move permanently, have a holiday home or a means of investment.
As we look back on the old year and we look forward to the new year ahead, I think the Jerusalem real estate market has quite an interesting year ahead of it. Shana Tova. Wishing everyone a happy and healthy new year.
This article is based on the opinions of CapitIL Real Estate CEO and co-founder Ben Levene. Levene is a Jerusalem real estate expert with over 10 years of experience, specializing in helping Anglos purchase real estate in Israel. To start your Israel property search, please contact Levene at +972-53-822-4336
or [email protected].
