War and Real Estate: Why JLM Housing Prices Rarely Fall
- Gedaliah Borvick
- 6 days ago
- 3 min read
When war breaks out in Israel, many people assume housing prices will collapse. In reality, that rarely happens - especially in Jerusalem.
When conflicts begin, we receive many emails and WhatsApp messages asking how it will affect housing prices. Many people understandably expect the market to follow a familiar pattern seen in most countries: buyers retreat, sellers cut prices, activity slows, and values decline.
Jerusalem real estate, however, often tells a different story.
The immediate effect of war on Jerusalem’s housing market is usually not falling prices, but falling activity. Transactions slow, showings become less frequent, and buyers temporarily step back while the national focus shifts to security and survival. In the early weeks of a conflict, the market often grows noticeably quieter.
Unlike in many countries, however, sellers in Jerusalem rarely rush to slash prices. Instead, many simply wait. This is somewhat ironic, given that Israelis are not exactly known for their patience. But when it comes to selling real estate during wartime, patience suddenly becomes a national virtue. Having seen this pattern before, most sellers understand that the conflict will eventually end and that the long-term fundamentals of the market will remain intact. Rather than accept lower offers, they often choose to delay transactions until conditions stabilize.
Another reason prices tend to hold steady is Jerusalem’s persistent housing shortage. The city’s population continues to grow, while new construction struggles to keep pace with demand. Limited land availability and strict planning constraints place constant pressure on supply.
In Jerusalem, the housing market is shaped far more by long-term demand and limited supply than by temporary crises. Those underlying conditions do not disappear during wartime.
Even when construction continues, war can still disrupt the supply pipeline. Permitting, inspections, and logistics often slow down, and even small delays can translate into fewer apartments reaching the market on schedule. During these periods, the market often enters what economists call a “low-liquidity” phase: fewer transactions take place, but prices remain relatively stable.
Of course, wartime uncertainty can create short-term hesitation. Buyers may prefer to wait and see how events unfold before committing to a major purchase, and developers may delay launching new projects until conditions stabilize. Historically, however, these pauses have proven temporary.
Interestingly, while domestic buyers may pause, interest from overseas can sometimes move in the opposite direction. After the October 7 attacks, for example, we experienced a surge in purchases from clients living in the Diaspora. For some, the motivation is aliyah. For others, it is emotional connection or solidarity. And increasingly, in an era of rising global antisemitism not seen since World War II, the motivation is practical: a growing number of Jewish families want a foothold in Israel - a place waiting for them should they ever need it.
As discussed in a previous column, Israel’s housing market has consistently demonstrated resilience once conflicts end. The quiet that sometimes accompanies wartime activity is typically followed by renewed demand when stability returns.
For now, the wartime market is defined less by falling prices and more by hesitation. Domestic buyers are cautious, transactions are slower, and sellers are waiting. But the overseas market has remained surprisingly strong, despite the relatively weak dollar. The underlying drivers of Jerusalem’s housing market - population growth, limited land, and enduring global Jewish demand - remain firmly in place.
Wars may slow Jerusalem’s housing market. But they rarely break it
Gedaliah Borvick is the founder of My Israel Home (www.myisraelhome.com), a real estate agency focused on helping people from abroad buy and sell homes in Israel. To sign up for his monthly market updates, contact him at gborvick@gmail.com.
