French Immigrant Housing Trends

coastal housing

coastal housing

The tally of Jews immigrating to Israel from France has grown to nearly 7000 with over one thousand arriving last month. It is believed that terror attacks against the Kosher Market last January and threats against those protecting Jewish sites as well as mass desecrations of Jewish graves have brought many French to the decision of purchasing a home in Israel.

Buying trends for the French immigrants show that they are still buying in what was one of the strongest earlier French communities, Netanyah. Growth in the area of Ashdod, although quieted last summer due to thousands of rocket attacks near or adjacent to the city has not resulted in a real estate losses. In spite of the recent war Ashdod is growing strongly and steadily as prices increase there over 25% in the last two years.

According to an Advocate for a local law firm specializing in French language customers and reported on in Globes the French are buying homes to rent until they make the move, even buying “flips” older properties to renovate and resell. Many are also buying businesses here, “Clients that came to me were very interested in food, mainly fast food – hamburgers, pizzas, as well as cafes and patisseries. They’re bringing the knowhow here from Paris in the field of baking and food and that gives them a relative advantage over Israeli businesses.”

Communities along the seacoast are experiencing the highest level of growth from French purchasers, from Ashdod to Hadera. Jerusalem attracts a more religious French population who are attracted to the neighborhoods of Bakaa and Mekor Haim where there are French synagogues.

French Bakery in Tel Aviv

French Bakery in Tel Aviv

Why isn’t my apartment selling? Pearls of wisdom from a former sales manager.

remodeled kitchen in contemporary trends

remodeled kitchen in contemporary trends

“Why isn’t my apartment selling?” This is a question in any market, but especially one experiencing a slow-down that sellers ask.  To quote a former sales manager of mine there are three primary reasons; “terms, PRICE, and condition” his sage words also included “anything will sell for the right price”.

Since sometime in early 2011 when government enforced Bank of Israel austerity measures went into place and the market overall began to trend downward.  In the eyes of the government as well as astute individuals in economics this was a necessary correction.  Other factors have also entered into this equation; two of the world’s major currencies are experiencing losses, the Euro and the US Dollar, as are their respective economies.

Israel is not an economic island.

Both the sales and rental markets here have experienced downward slides.

Unlike the buying and selling personality of the States, the Israeli seller doesn’t have a vast reservoir of information like the Multiple Listing Service where over 90% of properties are listed exclusively with agents with all its data of solds, listed, etc. Statistically only 1/3 of properties on the market here are in exclusive listing agreements.The mentality is “my neighbor is asking this, my property is better than his, so I should get this.” Meanwhile ‘that’ price may have no basis in real market value but just owners overestimating their values. Appraisers often fall victim to the statistics of “what are people in the area asking” and have little familiarity with the real grit looking at numerous properties with buyers and seeing what’s selling for what price and who is in the market buying it, even they can often give a false view of value and not a real market value.

Another deceptive reality in the marketplace is with the prevalence of such do-it-yourself for free websites such as Yad2 or Win-win, whether its homes or vehicles, individuals can instantly place free ads that are “trial balloons” just to see if the fish will bite at an inflated price and are not serious sellers. This is common enough that it can give a false impression of true market value.

A universal truth regardless of country is that unless you have an educated seller who is critically aware of his marketplace, sellers overvalue their own homes.

Real market value can usually be hit on fairly closely by an experienced realtor in the area. Another judge is an individual in the buying public who is seriously looking to purchase also seems to have an innate feel after a bit of looking as to what’s overpriced and what’s priced right and they are not influenced by emotional attachment to the property ‘for sale’.

Another factor mentioned earlier is the strength of the present reserve World currency, the US Dollar.  Even though rentals are now pretty much quoted in shekels, when it comes to sales there is still a background thought of the $ value even if the buyer has his money in British pounds or Euros.  If you listed when the dollar was at 4.05 to the shekel and now its 3.68 your price should be adjusting to the loss of the dollar rate.  To make it simple, we’ll use 1 million $ as a reference; if you listed at 4,05000 NIS (when it was equal to 1 million US) if the shekel is now 3,680,000 you need to lower to that.  If it wasnt selleing after a couple months of trying, you may need to lower to and equivalent 0f 10-20% less.

Since 2011 property values have dropped to where sellers here are having to ask and get about 15% less than they could have gotten in 2010. Although terms and condition do make an impact, referring back to my former manager, “it’s always price” and “any offer within 5-10% of asking price is a good offer, not an insult”.

The good news is for those who are truly priced right at the gate, they will still be able to sell to the educated buyers out there who know what the right price is.

 

 

 

Is the Market Waking up?

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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.

Prepare for a new wave of French buyers

The recent crisis in the European econmoy that has sent Euro holders reeling has brought a rise in interest in local property purchase.  In France a recent Israeli apartment expo brought a record attendance of more than 5000. Reasons for the record attendance not only reflect fears of a failing euro and lost values there, but rising anit-semitism after the recent shootings in a French day school.

Many fairgoers are young couples looking to make aliyah and seeking upscale areas where they can attain a similar standad to France, such as Hadera and other coastal cities less expensive than Tel Aviv.  Older attendees looked at Netanya and Jerusalem to be closer to their religious communities and friends already living here.

The intifada years of 2000-2004 were not only marked by recession, unemployment and business losses, but a significant drop in the real estate market.  In the years following, 2005-2010 as the country entered into greater stability due to increased intelligence and security measures, the property market entered the boom that doubled values almost overnight for those who did buy in the earlier half  of the decade.

During the intifada many agents exagerrated the role of the French buyer who enjoyed strong property value in France and saw local real estate as a bargain.  There came a significant influx of French buyers into the local property market. French fears of future anti-semitism caused buyers to invest in a pied-a-terre here that would be an investment of assurance.

Many of the French property owners did not make aliyah, however, but became landlords or simply came to visit leaving their apartments here empty. In the ensuing years a percentage saw that France seemd economically more opportune along with rise in their Israel property values so some even sold their holdings here for profit.

The results of this recent fair attendance and poling there showed that there is a shift in attitude with buyers looking more seriously at making Israel their home.

Greece’ last week’s run on banks. Where do they move money?

In the past week the country of Greece now in a Euro crises has seen over 890 million Euro withdrawn from its banks by depositors in the last week.  While the recent rash of withdrawals sent a tremor through other countries expeiriencing similar failures economically, Greek depositors have actually been systematically moving their assets out of their banks for nearly two years.

Where are Greeks moving the money to?  First most popular is into German, British or related Banks seen as stable such as HSBC. Another form of popular investment is in stable property markets nearby, such as Berlin, in tangible commodities such as precious metals.

Although Israel may be experiencing a market correction of late that has seen property value dip and the market slow, investors who see Israel as a safe haven may push prices back up as British and French place their Euro holdings in property in Israel. This makes a difficult reality for local people hoping to move up the property ladder reasonably, but will continue to the market moving here.