Why are Real Estate Prices Escalating in Jerusalem?

The most attractive locations to foreign buyers are all the neighborhoods surrounding the center of town, Talbia, Rehavia, Nachlaot, German Colony, Katamon, and Baka. Some Haredi neighborhoods are sky-rocketing as well, such as Gush 80, Ramat Eshkol and especially Shari Hessed, where prices are among the highest in the country. Even the neighborhood of Musrara, which until recently has been considered the slums, is attracting many Americans due to its proximity to the center of town and the Kotel, prices there are escalating as well. In fact, all the neighborhoods desirable to foreigners are within a thirty to forty minute walk to the Kotel.