BAGHDAD — Soaring prices. Precious few homes. Bidding wars. Sound like Southern California a few years back? Welcome to an unexpected bright spot in global housing: Baghdad.
Attracted by news of decreased violence, thousands of displaced Iraqis returning to Baghdad's safer neighborhoods are fueling a bit of a real estate frenzy.
Last year, home prices plummeted and rents dropped as Iraqis left town in search of more stability. But now, some say it's almost impossible to find a suitable place to live, with sales prices doubling in certain neighborhoods and the most affordable homes being snatched up as soon as they're on the market.
"Day by day the prices are increasing, and I keep on decreasing my options," said Hussam Jassem, 35, a government worker who earns about $400 a month, a typical middle-class salary. A 750-square-foot home in a lower-middle-class neighborhood costs about $150,000. In the upper-middle-class neighborhood of Karada, a 2,300-square-foot plot of land alone costs $350,000.
"I will end up with nothing if I don't find something soon."
Jassem isn't asking for much: an affordable home in a safe neighborhood with enough space to fit his parents, two sisters and brother.
But in a city like Baghdad, where insurgents have descended on entire neighborhoods and kidnappings and bombings are still a danger, Jassem's task isn't easy.
In the last two months, he and his family have scoured the city, inspecting more than 40 homes, only to be stymied again and again by rapidly increasing prices and a shrinking pool of homes.
In December alone, an estimated 46,000 Iraqis returned to Baghdad from Syria, and more than 67,000 have come back since mid-September, according to the Iraqi Red Crescent Organization.
"The displaced people are coming back," said real estate agent Mohammed Hassan, who sells homes in Shaab, a lower-middle-class neighborhood in northeast Baghdad. "There is plenty of demand and I have nothing to supply them with."
In September 2005, Jassem, a Shiite Muslim, and his family left Dora, a southern Baghdad neighborhood that Sunni Arab militants from the group Al Qaeda in Iraq had claimed as their base. Last year, insurgents drove Christians from the area, demanding that they pay a special "tax" or leave.
"When the security started to become bad, people sold their property for any price because of terrorism," said Haji Ranzi, another Baghdad real estate agent. "They just wanted money to leave the country. Now they come back, but they spent all their money."
