Nachalot Real Estate - Apartment Prices in Jerusalem

November, 2006 - Copyright by Morris Rosenthal - - contact info

I want to get the current price range down. in Nachalot, a central Jerusalem neighborhood that was once a lower middle class Sephardi stronghold and is now being bought up by Americans. For the time being, it's a strange mix of new buildings (built on the lots of tear-downs), old stone houses that have been taken as vertically high as the engineers dared, and some places that look like hovels with concrete garden walls. There aren't a lot of large gardens in Nachalot, some houses have no green space at all, with whatever tiny bit of lot that isn't built on being paved with stones. The houses are decidedly too close together on the side streets, ranging from touching to a couple yards. Since the higher floors are usually smaller than the lower floors, sometimes you get better spacing off the ground. The construction methods are often highly questionable, and the construction quality ranges from OK to poor. Still, as long as they use enough rebar, it's unlikely to collapse unless there's a severe earthquake.

There are some tiny apartments available in Nachalot, in the 1 to 1-1/2 room range, but there weren't any prices for these in this week's paper. In the 2 to 2-1/2 room range, asking prices started around $145,000 and ranged up to about $175,000. I would treat these as starting prices, no self-respecting Israeli would advertise a property for the amount they would actually settle for. At the higher end of the range, we're talking about a new building with air conditioning, a balcony and an elevator. The elevator is an especially good idea for this apartment in the ad since it's on the fourth floor. Some of the streets in Nachalot are navigable by car, many are alleys. In a couple cases, the streets are wide enough for cars, but have a broad stairway at either end that makes them impassible. It's usually a quiet neighborhood at night, barring parties or Simchas, but anything goes during the day, especially with all the construction noises. While Nachalot is bordered by a couple major roads, the traffic noise isn't that bad, and after a short time in Israel, you won't even notice the horns.

In the 3 to 3-1/2 room range I only saw one real estate ad with pricing this week, an 80 meter apartment in a new building for $230,000. It's hard to picture a new apartment in this price range without a porch or balcony, but they don't mention any details in the ad, which is characteristic of some agencies who feel they can sell you once they get you on the phone. The same square footage in the German Colony would probably cost twice as much, so despite the recent run-up in Nachalot prices, it's still something of a "bargain" for American shoppers. In addition to a lawyer, you'll want a construction engineer to inspect any property you are thinking of buying, and not just for the typical leaks and molds. The construction in some of Nachalot's older buildings looks like it was done by on a trial and error basis, where anything that got added on and didn't collapse was considered a success. While that might be fun for students, I wouldn't want to let children sleep in some of the rooms I've seen. The building codes in Israel may look fine on paper, but the practice is somewhat different.

There was only one large apartment advertised in Nachalot this week, i.e., four rooms or greater, nor cottages or villas for that matter. These units do exist in Nachalot, with prices over a half million, but there's such a limited stock of housing in this crowded area that there aren't any listed in the paper at the moment. The unit listed with a price was 4.5 rooms, a large kitchen (not the norm in Jerusalem construction), a Shabbos elevator, parking, and a "splendid view." All yours for just $575,000. I'll have to walk by some realestate offices to check the window listings, because I get the feeling some of the "American market" apartments aren't even listed in the Hebrew papers. One day I'll do a page about the American ghost towns in Jerusalem, arranged along the wall of the Old City, across the valley. There are two existing neighborhoods of million dollar plus homes, and another under constructions, that are abandoned practically year round by absentee American and French owners who come for holidays.

The amount of construction going on in Nachalot and Mahane Yehuda neighborhood on the other side of Bezalel is staggering. There's usually at least one tear-down and rebuild or massive shipputzim (renovating) project taking place on every street. The key for Americans buying in Nachalot who want a bigger home than whatever is being advertised is the Eeshoorei Bineiah (Building Permission). If a home is advertised with building permission, it means the seller is claiming the city has given permission to expand the structure in some direction, usually up from the roof. I'll revisit this page in a month and update it with some more market prices from the papers. A word to the conservative. The entire Jerusalem real estate market is "upside-down" by traditional measures. Houses sell for 300 to 500 times what they could bring in a monthly rent, if they could be rented in the $1000 plus price range at all. The rule-of-thumb for America before the recent housing bubble was the price should be about 100 times the monthly rent for a residential property.