Speaking to brokers about various aspects of the Israeli real estate industry you get many different opinions. The one message that has come across loud and clear, across the board, is that the market is not waiting for American or other foreign buyers. Brokers prefer to work with Israeli buyers rather than to chase foreign buyers. Don’t get me wrong. Every broker is happy to engage a US buyer. However his optimism vis-a-vis and Israeli buyer is a bit more subdued.
A few factors contribute to this attitude. First and foremost is the long sales process from the typical American buyer.
In places like Ramat Beit Shemesh’s new neighborhoods, Ramot and other heretofore more affordable neighborhoods, prices are rising at a dizzying pace. Israelis who are fully aware of this trend are buying houses overnight, before the market runs away from them. To paraphrase Julius Caesar, “they hear, they see and they buy.” This keen awareness and sensitivity is not felt by Americans, six thousand plus miles away. Americans on the whole tend to drag their feet, while learning the market and deciding if they want to buy. They also take time to build trust with the broker.
There is a certain overconfidence or even arrogance that Israel is just waiting for their US dollars, which is totally not true anymore. Israel today is a rich country with a very strong currency. It has been over a decade since sales prices were offered in dollars.
Even in areas where prices are rising but not as rapidly like Jerusalem, properties are in short supply. Demand is out the door and around the block for every apartment that goes on the market. The brokers don’t have the need or the patience to deal with a foreign buyer, when they have eager buyers banging down their door. Moreover the Israeli sellers have gotten over their misconception that Americans will pay more. Today there is one price for all.
Recently the government decided to lower the purchase tax rate for investment apartments, unleashing a lot of investors with investment money into the market. This added yet another element of demand that hasn’t been in the market for several years, since the second home purchase tax was imposed.
All in all if you want an apartment in Israel today you will need to be nimble and determined. You need to get pushy, Israeli style, before this aggressive market locks you out.
