For months I have been posting about the slowdown in the real estate market in Israel countrywide. It started last spring when austerity measures of 40% down payments were instituted along with tent city protests against the high cost of housing. Although many already on the housing ladder had the funds to ‘buy up’ the fear that prices might come down more put a temporary paralysis in the market. The saying was “only sellers that have to sell are selling and for 10% less than 2010”.
It isnt just that its summer, although that is a traditional real estate cycle of high activity in the later months of spring and summer. There seems to be a perception that waiting is now NOT the thing to do. Haaretz today published an article subtitled, It’s time to stop sitting on the fence: Housing prices aren’t going to drop much, if at all.
In my personal real estate business and circle I am always asking other active agents how they are seeing trends in the market. Just this week facing two situations of multiple offers on the same property, I asked one of the other agents “What gives?” Her explanation was one I expected since two of the parties involved were French, those with Euro are afraid, the French are afraid of high taxation from the new PM Hollande and anti-semitism rising. Other Europeans are afraid of their currency value dwindling in paper assets and are ready to invest in a real estate market that has remained traditionally strong, Israel.
For Americans, the dollar is reaching excellent heights with many expecting it is a short-lived rise due to the nearly universal acknowledgment that inflation and devaluation isinevitably coming, especially if the present tax and spend administration there regains the White House.
For Israelis its summer, yes, but there is also the perception that prices did come down, sellers who couldn’t sell are lowering or have lowered and when they do that may be as good as its going to get due to the influx again of foreign money.