Done Deal: What to do when the market is stagnant?

Real estate prices haven't been lowered as far as they might...they could still go down further

By AVI SASI
August 2, 2011 17:18
2 minute read.
Exterior of property sold by Re/Max vision J'lem

Exterior of property 311. (photo credit: Courtesy)

 
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Avi Sasi is the CEO of Housing T.L.V Ltd.

In light of today's economic situation as seen in the street demonstrations around the country, the real estate market is very stagnant! These strikes and demonstrations show the growing discontent and frustration of the middle class. And the market is affected.

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It is now much more difficult to sell apartments at a reasonable, even logical price than just a few weeks ago. No one is willing to buy fearing the prices of apartments will drop soon. And the sellers are entrenched in their positions and unwilling to lower their asking price.

In my personal opinion, in Tel Aviv, especially in the central and northern-most sections of the city, prices have not and will not go down but will remain at today's level. What does this mean? It means that by not being lowered, they have actually declined.

My recommendation to apartment owners today would be not to sell, nor panic over the prices. This very panic could cause the real estate market to collapse as happened in the US in 2007.

And to the buyers, people seeking apartments today, I'd recommend that they continue to search because the change won't be in the price but in the amount of apartments available, and their sizes. The big change that's going to happen will be authorities allowing the splitting of larger apartments, over 100 square meters, into two or three smaller apartments. This should be food for thought both for owners of the larger apartments as to why they should wait with their sales...as well as for families who need to buy larger apartments today. In my estimation, in the near future we're going to see some sort of slow down in the real estate market following the public protests against the high cost-of-living and housing. However, in the future, the prices will resume their upswing, increase again and the Israeli real estate market will re-flourish.

Bottom line

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Whoever is looking for an apartment should keep looking because those who want to sell, will. And those who haven't yet thought of selling, may now consider putting their place on the market. In my opinion, prices haven't been lowered as far as they might...they could still go down further.

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