Real estate is hot, and Zillow Research is projecting that it is going to get even hotter. That is terrific news for Real Estate IRA enthusiasts, who stand to benefit from several favorable trends as we roll into the peak home buying season of 2018.
First, homes are selling like hotcakes nationwide. 2017 saw the shortest time-on-market for the typical U.S. home on record. The average home sold in just 81 days last year – faster than even the crazy days of 2006-2007, just before the mortgage bubble collapse.
The high demand was not just for homes in San Francisco, Seattle and Miami. Homes sold faster in 2017 than in 2016 in nearly all the country’s 35 biggest metro markets.
July was last year’s hottest home sales month, when the average home closed just 71 days after its listing. But even that is misleading: The closing process is routinely 4 to 6 weeks long, especially for deals involving mortgages. So homes are actually coming off the market and under contract pending financing much faster than that – frequently in 30 days or even less.
On top of the lighting fast sales, the tight supply relative to demand is forcing buyers to bid against each other just to get in a home. One out of four homes sold in 2017 actually sold above their list prices.
The fastest-selling market in the U.S. was San Jose, home of the famed Silicon Valley, where buyers snapped up homes in an average of just 41 days. New York was the slowest market, with sales closing an average of 134 days after listing.
Here in the Southeast, Self-Directed IRA investments in real estate have been hopping. Many of our clients have had great success with their accounts, the Atlanta metro market averaged 71 days. June was Atlanta’s fastest selling month when the average home closed in 63 days. Charlotte averaged 67 days, Tampa averaged 81 days, Austin averaged 61 days, Orlando averaged 86 and Baltimore averaged 94.
What lessons can we glean for Self-Directed IRAs with real estate investors?
According to Zillow’s market research, summer is the time to list homes for sale. People want to move when children are out of school, and summer is the traditional time for businesses to transfer employees for that reason. You want to have the sale wrapped up by the time the kids go back to school in September.
The higher the demand, the more bids you can consider in a short amount of time. To maximize Real Estate IRA profits, bunch your bids to drive buyer competition. The time to do that is when the market (and the weather is hottest.)
Conversely, the time for your Self-Directed IRA to buy real estate is in the fall or winter. Buyers are less competitive, and you may be able to snag a bargain for your Self-Directed Real Estate IRA investment portfolio.
You can get concessions in many markets. Another Zillow report found 76 percent of sellers had to give something up in the negotiation process. Price, of course, was the most common.
For more information about Real Estate IRAs, or to schedule a no-obligation consultation on how you can take more direct control of your retirement finances and benefit from direct real estate ownership within an Self-Directed IRA or other retirement account, contact us today at 866-7500-IRA (472). Or visit our extensive library of articles and blog posts and other educational materials at www.AmericanIRA.com.
We look forward to working with you.