The real estate market in Jerusalem is booming, as the improved security situation has prompted many Jews, especially from the United States, to purchase apartments in the capital for use solely during the holidays. But the flourishing market in luxury flats is also causing concern among residents and urban planners, who believe that rising prices are responsible for driving people out of the city by making housing unaffordable for most people.

Y.R. has a senior position with a high-tech company in the capital. She is the only year-round resident of her apartment house in the tony German Colony neighborhood, and asked that her name not be used out of fear of a break-in. Her neighbors are Jews who live for most of the year in the U.S. but come to Jerusalem for the holidays.

"When the parking lot fills up with rental cars, I know they're back," she said. "It's not a pleasant feeling to know that you're the only resident in a building and that if something happens, there's no one to turn to. There's also no one to join forces with in working to solve problems that come up in the neighborhood."

Realtors in the capital say that over the past year and a half, a few hundred apartments have been purchased by foreign residents. Over the past 10 months, apartment prices have jumped 40 percent (see box). The average cost of a five-room apartment in the city's more expensive neighborhoods, which include Rehavia, Talbiyeh, Kiryat Shmuel, the German and Greek Colonies, and Yemin Moshe, jumped from $420,000 in 2004 to $583,000 at present, and the average price per square meter has risen from $3,000 to over $4,000 over the past three years.

"The Americans are back, and they are wealthier than they ever were before," according to Benny Lobel, deputy managing director of Anglo-Saxon Realty. Lobel said that most of the new owners are Orthodox Jews who see their purchase as an ideological and emotional statement, so price is a secondary consideration. "The result is that prices have simply gone crazy," he said.

Architect Assaf Shaked, a planner for the neighborhood administration of the Ginot Ha'ir area, where many of the foreign-owned flats are located, said that local residents are fearful that their neighborhood might turn into a ghost town. Shaked said that various options were discussed in a meeting of the Association of Neighborhood Administrations' forum of neighborhood planners, but most would be impossible to implement from a legal standpoint. "We wanted to initiate discussion of the matter more than we wanted to actually propose solutions," he said.

Yaira Wiesenthal, director of urban development for Jerusalem's neighborhood administrations, believes that the "ghost town" phenomenon has become rampant.

The best known of the capital's "ghost towns" is David's Village, an ostentatious project built in the early 1990s on Mamilla Street, opposite the Jaffa Gate. Because most of the owners live abroad most of the year, the neighborhood is virtually deserted. "Residents tell me they are afraid to go outside at night," Shaked said. A number of projects similar to David's Village - which aroused opposition among Jerusalemites but was considered real estate success are now cropping up in other central ocations, such as the YMCA complex, Talbiyeh and Independence Park.

Shaked said that the economic lure of real estate sales to oreigners is wreaking havoc with the capital's historic eighborhoods. "We have recently begun seeing contractors uying up historic mansions in Rehavia and Talbiyeh to xpand them, and to build multistory buildings on empty ots. Older wealthy residents are taking advantage of the pportunity to make a profit and move to the coastal plain o live nearer their children," he said.

The phenomenon is also taking a toll on middle-class erusalemites, who see their dream of buying a home isappear as neighborhoods go upscale. In the past, foreign buyers would concentrate in areas like Talbiyeh and Yemin Moshe, which are within walking distance of the Western Wall or the Great Synagogue. Recently, however, the buying wave has also reached more distant neighborhoods, such as Beit Hakerem and Makor Haim. The southern neighborhood of Baka, for example, once a middle-class bastion, is now beyond the means of many local home buyers. "You don't see any Israeli buyers in neighborhoods like Baka anymore," said David Leib, manager of Shiran, the city's main real estate database for brokers.

Rafi Dabra, chairman of the commission for public participation in Jerusalem's master plan, believes that the higher prices are thwarting attempts to resuscitate Jerusalem's dying center. "I don't see Israelis willing to pay $800,000 for a downtown apartment. If reasonably priced flats are not available there, downtown will die," Dabra said.

But Israel Kimchi of the Jerusalem Institute for Israel Studies sees things differently. He said that there are Israelis who can afford the rising cost of a flat in the capital, but do not want to live there. "I don't see people from Herzliya Pituah or north Tel Aviv running to buy an apartment in Jerusalem. From this point of view, the purchase of apartments by wealthy Jews from the U.S. and France is a positive thing, strengthening the bond of Jews from outside the country to Israel. But the situation must not be allowed to become rampant so that entire streets go dark," Kimchi said.