While the young, educated and secular are abandoning Jerusalem and the debate continues as to the practicability of the Moshe Safdie plan for solving the capital's demographic and real estate problems, the demand for properties in the rural communities just west of the city remains stable and high. Realtors in the area report its small real estate markets are succeeding where the big Jerusalem market failed - in attracting demand even from residents of the Tel Aviv area.

The Jerusalem corridor, which comes under the local authority of the Mateh Yehuda Regional Council, comprises some 45 rural settlements, most of them moshav semi-cooperative agricultural communities, and there are three non-agricultural, non-cooperative communities and eight kibbutzim.

Most of these communities have an intimate atmosphere, and only two or three properties are put up for sale each year. In several communities, especially the private estates, there have been no real estate deals for many years.

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"The main reason," explains Janet Amitai of Remax Vision, "is that even if they managed to sell their properties for $700,000-$800,000 - the upper limit for this region, the capital gains taxes and payments to the Israel Lands Administration would leave them very little money. The expansion neighborhoods of the moshavim, on the other hand, are more dynamic and most of the deals are transacted there."

The slump in the real estate market hardly affected the Jerusalem corridor, mainly because there is so little supply there that demand always outstripped it. Even so, most locations have not recorded any price hikes lately.

A substantial share of demand for properties in the Jerusalem corridor communities actually comes from the coastal plain, even though most of the demand is from Jerusalemites. The prospective buyers are usually over the age of 40, with only a few of them being young couples, mainly due to the high prices.

An important real-estate factor for the Jerusalem corridor is the distance from Highway 1 (Tel Aviv-Jerusalem highway). The greater the distance, the more isolated the community and the less buyers are willing to pay.

Like estates

One exception, in this and other respects, is the urban community of Nataf, 20 kilometers west of Jerusalem. This community was built in 1981, on land purchased from residents of Abu Gosh. Nataf is home to some 100 families. Some have been there since the beginning and usually have plots of land measuring 4-5 dunams (1-1.25 acres). The rest arrived during the second stage of construction and have smaller lots, of about 2 dunams. The screening committee for new families maintains a strict balance between secular and religious families, with a ratio of about two-thirds secular and one-third religious.

"The big advantage of this place is that the land is privately owned but closely resembles the estates in the semi-cooperative moshavim," says Ran Piro, a local property appraiser. "Still, there are a few problems in Nataf, such as the inconvenient access [from the main road], the meticulous screening committee, and the almost total lack of properties for sale."

Why, then, if this community is so far from the main road, is there so much demand for housing there?

"Because anyone who goes there wants to go there, and is willing to pay the price," explains real estate agent Shuki Carmel. "A few years ago there was one deal worth over $1 million for a house on a 4-dunam lot. This was quite an exception, however, and most similar properties sell for $700,000-$800,000, or $50,000 less for houses on 2-dunam lots.

Moshav Beit Nekofa near Abu Gosh is one of the high-demand locales in the Jerusalem corridor. It is a community considered to have all the "right" features: a well-established population; founded in 1949 by immigrants from Yugoslavia and today home to businessmen and well-heeled professionals. Beit Nekofa is quite near Highway 1, enabling residents to reach Tel Aviv relatively quickly, and attracting demand from the coastal plain.

"Here, too, there is not much population movement," says Carmel. "Whoever buys here, stays." The moshav's expansion section is very small relative to other places, so even there, transactions are few and far between.

An estate on the moshav, measuring 5 dunams in the residential section, costs about $800,000, while a single family home on half a dunam in the expansion neighborhood costs $550,000-600,000.

Givat Ye'arim is a moshav that was built in the 1950s by immigrants from Yemen and is considered less desirable. It is located on the road between the Castel and Ein Karem, making it very close to Jerusalem and less attractive to residents of the coastal region. Part of the moshav's expansion neighborhood is farther from Highway 1, and the moshav's population, particularly the more veteran members, represent a lower socioeconomic level than that of other local moshavim.

"Givat Ye'arim's expansion neighborhood has two sections, each with its own issues," says Amitai. "The first has access problems - the road leading to it is very long and winding, and the second section has a cellular antenna tower that does not help matters any."

But that is not all. Amitai says that while the residents of Beit Nekofa and other moshavim invested considerable resources in building their homes, in Givat Ye'arim the houses are of a much lower standard, "as if [the residents] were satisfied with just owning the land and did not have much left over to invest in construction."

Not long ago a house in the expansion neighborhood sold for $360,000, and the general price range there is $350,000-$400,000. Not many estates are sold, and one recent attempt to sell an estate for $800,000 was unsuccessful. The seller will probably have to lower his price, as estates in Givat Ye'arim are estimated to be worth only $600,000-$700,000.

Not far from Givat Ye'arim is a moshav where demand is much higher - Ramat Raziel. Although it is farther from Highway 1, it has a better image than Givat Ye'arim. Thus a half-dunam lot in Ramat Raziel sells for $150,000-$220,000, while such lots on Givat Ye'arim fetch only about $130,000.

"The price gaps for land explain only some of the differences between the prices for homes and villas in the expansion neighborhoods," says Piro. "The other factors include the image of the community, the presence of cellular antennas and the quality of construction. All these result in a 20-percent differential in prices (homes in Ramat Raziel sell for as much as $530,000 or even $580,000)."

Another two moshavim that are geographically close, but very different from a real estate point of view, are Shoresh and Sho'eva, which are both about five kilometers from Sha'ar Hagai. While Shoresh has gained momentum and has even become a kind of real estate bubble, Sho'eva has been left far behind, although prices there have recently perked up a bit.

Sho'eva was built in the 1950s as a worker's village for Yemenite immigrants. At some stage the moshav closed down and was rebuilt. The price of homes in the expansion neighborhood ranges from $400,000-$430,000, reflecting a recent increase of about 10 percent.

Amitai believes the construction of the nearby highway interchange has contributed significantly to the value of properties in Sho'eva. Estates there can cost $650,000-$700,00, but a lot depends on the quality of construction. Most or the homes there are slated for demolition or at least thorough renovation.

Local bubble

Shoresh is a different story altogether, as evidenced by the people who have chosen to move there: Victor Medina, Aharon Fogel, Ilana Dayan and Matan Vilnai. The moshav, which was founded by immigrants from Eastern Europe shortly after the Israel's establishment in 1948, is considered one of the most prestigious locales in the Judean Hills, and villas in the expansion neighborhood have sold for as much as $1 million.

"It is hard to find an objective reason for this," says Piro, "but the market has its own ways, and this place has made a name for itself among people willing to pay large sums of money to live here. Shoresh is therefore apparently a local bubble, although million-dollar deals are exceptional and do not reflect the general market, which is actually a bit lower than Beit Nekofa. Thus some villas sell for $800,000-$900,000, while smaller homes fetch just $500,000-$600,000."

No estates have been sold in Shoresh in the past few years, but estimates put their value at above those in Beit Nekofa.

"It is mainly a sellers' market in the Judean Hills, due to the small size of the communities and the very low supply of properties," concludes Carmel. "This reality has caused price stability with a slight upward trend, something that will probability ensure the attractiveness of this market in the future among those who wish to live on special properties between Tel Aviv and Jerusalem."