here because a weak dollar means they can't get as
much for their money in a second home somewhere
else. On the other hand, the many French Jews buying
in Israel likely are pushed by the strong euro and anti-
Semitism at home.
And then there are the slightly contradictory mes-
sages of international terrorism. On one hand, buyers
may see the recent decrease in Palestinian terror attacks
here as a sign that it's time to invest in Israel again,
although it remains to be seen whether Palestinian
Authority President Yasser Arafat's recent death heralds
the inauguration of a new era, as some have predicted.
At the same time, terror attacks around the world since
9-11 may have contributed to making Israel seem
about as safe as anywhere else.
Whatever the reason, the growth thus far has been so
extensive that real estate agents say they are forced to
turn away some foreigners because the demand for new
or renovated apartments in central Jerusalem exceeds
the supply.
"There aren't a lot of properties," said Isaac Levy,
deputy CEO in charge of marketing and development
for Ambassador Real Estate. "The high demand and
low availability mean that good properties are some-
times sold within days."
Levy said foreign property purchases now constitute
about 40 percent of his sales, a signifi-
cant rise since two years ago, when they
comprised between 8 percent and 10
percent.
Jews abroad looking to buy in
Jerusalem generally want to be in walking distance of
the Old City, the center of town, the major hotels and
synagogues popular with English speakers, such as the
Great Synagogue, brokers said. This leaves only a few
neighborhoods that foreign buyers consider desirable,
including Rechavia, Talbiye, the German Colony and
Baka. In those areas, brokers said, prices have risen by
about 10 percent to 30 percent in the last year.
Because so many of those looking to buy in
Jerusalem are religious, they also generally want a bal-

cony or garden where they can put their sukkah
and a Shabbat elevator if they're above the sec-
ond or third floor, real estate agents said.
Jeffrey and Caren Goldenberg of Southfield
like the location of their four-bedroom
Rechavia apartment, which they share with
Caren's mother and three siblings, because they
can visit and host friends staying in the many
hotels nearby as well as walk to the Old City.
"It's nice to be in the middle of everything,"
said Caren.
The Goldenbergs usually stay at the apart-
ment for Pesach, Shavuot and Sukkot and in
the summer, although with so many relatives
using it, the apartment is occupied much of the
time. And when Jeffrey's parents, who live in
California and also have an apartment in Rechavia, are
in town, the families are suddenly only a few blocks
apart instead of thousands of miles.
Caren's family likes being able to do non-touristy
activities, like going to the grocery store.
"It's so different being in Israel in your own apart-
ment rather than a hotel," she said. "You don't feel like
a guest; you feel like you live there."
The majority of foreigners are buying in Jerusalem,
but Europeans and some Americans, mostly the less
religious, also have been buying in
cities such as Herzliya, Netanya and
Tel Aviv, where they gravitate toward
the beachfront properties.
Some Americans, though, buy out-
side Jerusalem because they are more interested in
being near children already living in Israel than being
able to walk to the Western Wall.
Myra and Abe Selesny of Southfield decided three
years ago to buy an as-yet unbuilt house in Beit
Shemesh, between Jerusalem and Tel Aviv. The location
would place them within easy access of three of their
five children and 14 of their grandchildren, who live in
Beit Shemesh, Modi'in and Efrat.
"It was a dream of ours to own a home or an apart-
ment in Israel," said Selesny. "If we were going to
come, we wanted to be near the kids."
But the Selesnys never had the chance to enjoy their
Israeli home together: Myra's husband died of liver can-
cer shortly after they bought the property, and she has
been renting out the four-bedroom townhouse since it
has been built. Nonetheless, said Selesny, "I still have
that dream of coming."

COVER STORY

Demand Outstrips Supply

Myra Selsny in front of her apartment in Israel.

Within Jerusalem, the cost of apartments in Rechavia
has gone up recently but the rise in foreign property
purchases has yet to have a major effect on the real
estate market as a whole. Neighborhoods not easily
accessible to the center of town or the restaurants and
cafes of Emek Refaim Street in the German Colony are
largely untouched by the localized boom, brokers said.
A nice but not necessarily luxurious home in one of
the in-demand Jerusalem neighborhoods costs about
$100,000 a room, said Alyssa Friedland, broker-owner
of RE/MAX Capital and RE/MAX Vision, both in
Jerusalem. Thus, a three-bedroom apartment will cost
about $400,000 because the living room is counted as
a separate room.
Of course, many variables can bring the price up. For
instance, a renovated and fully furnished four-bed-

An aim- ost completed high-priced apartment
complex in the Jerusalem neighborhood ofBayit
Vegan is one of many dotting the city's landscape:

-

room, three-bathroom apartment on the first floor of a
30-year-old building in Talbiye that overlooks the Old
City is selling for about $600,000, said Tzipora
Ne'eman, a real estate agent with RE/MAX Vision.
The apartment is equipped with central air condition-
ing and heating, an alarm system and a washing
machine and dryer. One wall of the living room is cov-
ered in stone facing, and the kitchen has separate
ovens, sinks and microwaves for meat and dairy. There
are no balconies for sukkahs, but the building, which
has its own synagogue, sets up a large communal
sukkah in its parking lot.
Ne'eman, 59, spends a lot of time emailing prospec-
tive clients who live abroad, describing properties and
sending digital photos. Sometimes, she said, Americans
will hear that an apartment is available and hop on a
plane a day or two later to see it before it gets snatched
up.
"The truth is we don't have enough to show them,"
said Ne'eman. "There are just so many people all want-
ing the same thing."
Across the street from the building Ne'eman is show-
ing, there is a new upscale apartment building still
under construction called the Talbiye Residence, where
a square foot costs between $740 and $930 — about
double what it costs on the other side of the road.
Buyers can choose the size of their apartment, which
comes with electric floor heating, underground parking
and access to four Shabbat elevators.
In the David's Village luxury complex located just
outside the Old City walls, near Jaffa Gate, the owners
of a three-bedroom home who bought three years ago
for $1 million are now asking for $1.4 million, said
Levy from Ambassador Real Estate. A penthouse at the
complex, which is noted for its terraced apartments
and its domes and arches, recently sold for $2.8 mil-
lion.
At nearby David's Royal Residence, which is con-
nected to the David Citadel Hotel, owners have use of
hotel services such as housekeeping and the spa. A one-
bedroom apartment there sold for $975,000, said Levy.
Another new housing project, he said, is slated to go
up shortly in the same area, whose proximity to both
the Old City and the center of town makes it an attrac-
tion for foreigners.
"During the intifada, people were scared to buy here,
people didn't want to live here," said Rivka Schlesinger,
a partner in Capital Property Consultants, which sells
high-end Jerusalem properties. After the bombings
slowed down earlier this year, "all that pent-up

DIGGING ISRAEL on page 28

4111

3/17

2005

27