If you’re living here in Israel or considering renting an apartment, you’re witnessing a softening housing market with rising rents. Sort of a double whammy of sorts.
If you’re looking to buy, you’re (just) beginning to see prices come down from astronomical levels but renters have been left out in the cold (and it’s cold today in Jerusalem).
Check out this section in the Jpost dealing with rent hikes. One has to think 
that the financial crisis in America will affect Jerusalem apartment prices as luxury units are currently going up. Who’s buying them? What effect does unsold inventory have on people looking to buy in other neighborhoods.
I think it makes sense to sit on the sidelines currently until prices come in some more. Just FYI — Israelis typically have a lot more equity in their homes than homeowners have in America. For most Israelis, their homes are their main sources of net worth. That makes prices a lot stickier because homeowners are not as apt to reduce pricing on their homes in order to get liquid.
