Shopping for an Apartment in Jerusalem

By Elizabeth Kratz

As part of my family’s summer vacation in Israel this year, we planned to spend a few weeks looking closely at the real estate market in Jerusalem. We were looking with an eye to buying an investment property that could serve as a primary or second home in three to five years, after all my kids finish high school. Of course, with our inaugural Israel Real Estate Guide coming up (and that you are reading now), my colleagues asked if I could describe my experience and share practical advice for those who wish to start their own real estate journey. 

I’ll start by saying that it’s a dream and aspiration of many American Jews to not just visit Israel annually or even more often, but to outright own a piece of property to call home. Many of us have already rented apartments for a week or two before and stayed in Israel’s vast variety of hotels and guest houses, but that idea of property—as part of that somewhat elusive aliyah journey we are all on—it not only represents something physical, it is physical. I know there are drawbacks to foreign home ownership, but my wish to start putting down roots in Israel trumps many other objections. While our weeks looking for a property on which to make an offer were complicated, I was left with the impression that I was much closer to my dream than before. 

The first really important thing I learned, part of a question I had before this trip, is that, yes, there are lots of independent and savvy real estate agents and lawyers who cater to American customers. They are generally aware of the sensibilities regarding relative apartment size and expectations, as well as concerns regarding making foreign purchases. Before I arrived, I was concerned as I had been told that most agents would be connected to specific properties, as those are the agents who most often come to the U.S. to make presentations. I didn’t really know if I would be able to find a more “MLS-style” experience, as is common in U.S. real estate transactions. I also spoke to a couple of olim-lawyers who explained how the process would proceed if I were ready to make an offer. Their experience working with customers just like me resonated and I noted there wouldn’t be too many unanswered questions. 

In addition to meeting with a Re/Max agent, we also went out multiple days with Eta Morris of Eta Morris Jerusalem Realty, an American originally from Morristown, New Jersey, who was very helpful and showed us many properties that were close to our original parameters. But one of the things she taught us is that we have to really know what we want and have a defined idea of the space we require in our desired location. A friend of mine suggested choosing a shul, school or community that I wanted to focus on, and sort of draw a bullseye around it, and consider how far away (two kilometers? five?) from that bullseye I could envision living. I thought that was good advice. 

My bullseye always seems to be Emek Refaim. My family has always enjoyed visiting our friends in Baka, Rechavia and the German and Greek Colony, and Emek Refaim Street is one of our favorite places to visit, though the street has become almost unrecognizable due to the light-rail construction that has really taken over the area. We also have heard that Nitzanim and the Yael Synagogue are shuls with similar American-style shomer Shabbat communities and lots of English speakers, which is a plus for us. (We spent one Shabbat in Baka and had a chance to visit Yael.) However, we also knew that looking directly in these neighborhoods in 2026 would come with a premium, though rentals in the areas are affordable (more on that later). An idea we had was to look a bit farther afield, in Arnona, where the light rail will eventually connect these communities much faster, at least six days a week. We were also pretty clear that we wanted to see existing properties rather than brand new homes or homes yet to be built; we didn’t like the feel of vacation apartments or even show homes with a view.

Comparatively, we found that a small three-bedroom apartment in Baka with a good-sized terrace for a sukkah, close to Emek Refaim, would be listed at around 6.4 million NIS; while in Arnona, a four-bedroom house with a ground floor garden and entire “furnished” roof would run around 6 million NIS. While we loved the location of the Baka apartments, we found the size of the bedrooms too small for my teenagers to share; in fact, one bedroom was compared to Harry Potter’s cupboard under the stairs, so that was out. Also, as investment properties, these would really only make sense for couples or very small families. We were told by friends, however, that the rental market in Baka (as well as Jerusalem, generally) is quite a bit different and is truly affordable for families; this makes for a good choice for new olim who may not want to buy right away and might be just looking to try out communities where they might want to live.

With the numbers clearly delineated, I realized that there would still be very little downside to making an investment, as the prices seem to keep rising and the neighborhoods have staying power, as long as I liked what I saw and wanted to live in the neighborhood. When the light rail construction is complete, my assumption is that the area will only grow in popularity. 

I was told I could easily get a mortgage, though I would have to pay a purchase tax of 10% in cash to the Israeli government (unless I made aliyah within two years of the purchase, in which case I could get a refund), and I would also owe 2% to the agent and 1% to the lawyers. These numbers seem reasonable if I was seeking to eventually move to the area and divest my property in America. But again, only if I am sure of the property and the neighborhood. The only reason to wait might be if the dollar strengthens against the shekel, and then I might be able to afford more space in a more central neighborhood. But the 1-3 ratio of dollar to shekel has been holding somewhat steady this year, and while I miss the days of 1-4, I am not sure they are returning so quickly. 

Arnona is a community I know less well, though I do have a friend who was able to tell me a little more about it and spoke highly of the Shay Agnon shul and the Lindenbaum Seminary, which also has an active shul. While Arnona is large, the neighborhood I was most interested in was directly across Derech Hevron, about a 15-minute walk from Baka. Apartment buildings are mixed here, with duplex-like houses along with apartments, and some are very large and suitable for families. The new American Embassy is being built in this neighborhood. The apartments here we looked at were true homes with a lot of space, though they do come “as-is.” 

One example of an “as-is” situation was a house we saw with a beautifully charming, painted and redone first floor, but the second floor was dated, had old bathroom fittings and what appeared to be water damage next to second-story windows. When I asked about it, I was told by the listing agent that there had been water damage, but it had been fixed; the owners had not got around to repainting. I was expected to take that as face value but then I was reminded that the signing in Israel is the same as the closing in America. So if I made an offer on that place and it was accepted, then I would be fully on the clock to get an engineer or architect in to look at the space and inform me of any big jobs required, because at the signing it’s all over. There’s no backing out after that, no adjustment of pricing or anything (and a pricing adjustment, I was told, is generally unlikely after an offer has been extended and accepted). So in addition to needing a reliable real estate agent and lawyer, it’s probably important to have a good engineer’s number on hand before making an offer.

Peppered throughout Arnona are also many apartment buildings that are brand-new; some appear to have never been lived in, even though the buildings are more than five or 10 years old. I was told that many Israelis had taken advantage of a 10% down mortgage scheme for an apartment that was yet to be built, but then by the time the apartment was ready, they didn’t want it anymore; they’d settled in other communities. This has led to a variety of really interesting apartments that are available but that no one seems to be living in. There are other buildings like this throughout Jerusalem, I was told, that have been built on spec for either Anglo or Israeli buyers who have somehow not materialized. It was my sense that there is a lot of real estate sitting unoccupied in the city, though somehow many of those properties were, unfortunately, not what I was looking for. 

As we flew home, I was a little bit disappointed that I had not found a property on which to make an offer. But with a little help from wise friends, I realized that for Israel, all of us have to adjust our expectations a bit, and have faith that what happens for us will happen at the right time. My good friends Chana and Rabbi Ari Sytner, who made aliyah last summer, told us that their pre-aliyah months of making plans, buying a property, taking measurements—virtually all they had envisioned before arriving—turned out to be completely different than what they actually ended up doing. For example, a lot of their bedroom furniture wasn’t usable. “The rooms in Israel are too small for our beds; the space has to be used differently,” said Chana. 

Ari added a philosophical approach: “America creates these structures that keep us feeling comfortable; we make lists and plans; if we have bad service, we can complain and the company will fix it. Here, a lot is about living with things you can’t change or with schedules and spaces we can’t control. But did we ever control those things in America, or did we just think we did?”

With Ari’s wise words in mind, coupled with Chana’s sense that many of their plans changed in unexpected ways, my directive is that I have to remain flexible as I proceed on this path. I may have to compromise on location or apartment size. I may have to make other choices that I didn’t expect to have to make. Maybe I will not end up in Jerusalem at all; in fact, this summer we also visited friends in Netanya, Zichron Yaakov and Mitzpe Yericho—communities that are known for having many olim. And we really enjoyed our time in these places. But as long as I see this search as part of what is meant to be my personal journey toward Israel, then I will work toward it, b’simcha.