The Bank of Israel dropped interest rates by a quarter of a point to 2.5%. Usually as interest rates go down, housing prices go up, but the Bank of Israel hopes that won’t be the case this time.

The central bank is hoping that the recent softening of the housing market and the mortgage limitations that were enacted last year to discourage speculators will mean that cutting the interest rate won’t lead to a surge in home prices like it did in 2008 – 2009. Other experts disagree. We’ll see….

Here’s a full article from Globes explaining the situation.

We had a lot of response to last week’s Country Estate in Migdal (click for details) asking for a video walk-thru.

Here’s a closer look of this great 400 meter home surrounded by 3.375 dunam of fruit orchards with a glimpse of the nearby 100 dunam (25 acres) of olive and mango orchards. For serious farmers I have another video walkthru of the orchards…

Here’s a rare film from 1913 showing a one-armed Joseph Trumpeldor plowing a field in Migdal shortly after he arrived in Israel from Russia. You can see the Arbel mountain and the Kinneret in the background.

Trumpeldor was the most highly decorated Jewish soldier in the Russian army (where he lost his arm in action) before he came to the Yishuv. He started out as an agricultural worker in Migdal and then Degania. Later he joined the famous Zion Mule Corps and then became a national hero when he lost his life defending Tel Hai

Joseph Trumpeldor

Here’s a current picture of the valley Trumpeldor was plowing with the Arbel Mountain, Migdal, Tiberias and the Kinneret.

View from Migdal of Valley

After checking this morning, the US dollar was 3.54 shekels a year ago. Today it’s 3.78. That’s an increase of 6.7%.

At the same time, the real estate boom has slowed and prices have dropped on average 3.7% in the last four months (more in Jerusalem and Tel Aviv, less in the north and south of the country).

That means for foreign buyers, you can find places that are effectively 10% – 20% less for you than a year ago.

Here’s an example of a deal here in Yavne’el. This lovely 186 sq meter home on 1/2 dunam lot would have sold a year ago for NIS 1,325,000 firm (US 374,293). Today, the asking price is NIS 1,290,000 flexible (US $ 341, 269).

Stay tuned for more statistics next week. Contact Shmuel for details about this house