Banks and mortgage brokers have had a busy 2021 so far as Israeli’s have taken out an all-time record of 22.3 billion in mortgages during Q1 according to reports from the Bank of Israel. The Bank of Israel reported that this represents a 44% increase from 2019 and a 7% increase from 2021.
While the obvious answer to the question of what is causing this record, is “Corona”, there are a few secondary causes as well which we covered previously.
The more important questions are what this all means for both home buyers and home sellers or even the rental markets as well.
What does this mean for home buyers?
For buyers it means that the market is crowded, very crowded. Crowded markets also mean buyers must be serious and decisive when it comes to buying a home. Some houses are on the market for a limited time only, any indecisiveness can work against you.
Buyers should also consider putting in a serious offer to start with and not risk losing their desired home through a bidding process. Serious offers are entertained while not so serious offers are quickly discarded as other offers come in.
Do not be overly dramatic with your requests! When sellers have an opportunity to deal with multiple bidders, they will tend to deal with the ones that will potentially cause the least amount of drama. Consider every specific request you make of the seller as a potential deal breaker. Rely on your agents (that’s us!) to guide you in terms of what is a standard request in the market and what sorts of requests will have the seller shut the proverbial door in your face.
Allow your seller the time they need to move out especially if its an important part of the deal for them. You may have to pay an extra month’s rent, but it is certainly worth it in the long run to secure the house you desire. When sellers are getting multiple bids, they may just sell to the people who are most flexible regarding the handover date.
What does this mean for home sellers?
While it might sound like a bonanza for sellers, people should be aware that the selling process might move faster than they expect. This could prove to be problematic for people looking for their next place to live. Line up a place to live before you put your house on the market because it might go way sooner than you expect.
Sellers should also not overplay their hand with regards to their asking price. Assuming they or their agent have done the homework beforehand regarding what the market can be expected to pay, they should stick with that asking price when encountering buyers. If they keep driving up the price because they think it’s a seller’s market it could lead to a “burnout” on their property.
Also, markets can cool down as quickly as they heat up so do not procrastinate listing your house if you are genuinely interested in selling. A few months down the road could be a completely different picture when it comes to selling a home.
What does this mean for renters?
Similarly to the fact that the market for buying homes is crowded, so too the rental market is “suffering” from a lack of supply. So, for most people compromise will the name of the game. You may have to compromise on price, location, size, terms etc. You may even have to compromise on them all!
Go into your rental search with an open mind and clear boundaries about what is important to you. Are you prepared to pass up on a suitable home which is 5 minutes out of your desired radius? Are you prepared to take a smaller home but in the perfect location for you?
Rentals tend to move quickly as well so no dawdling about the decision. See it and sign it!
What is in the future of the real estate market?
As agents we are always being asked what we think will happen in the market. With people still looking to move out of cities, increased Aliyah, and more workers working remotely, we do not anticipate any major downturn in the housing market during 2021.