Self-Directed IRAs are still sizzling, thanks to a strong housing market throughout nearly all major metro areas as we approach the end of the first half of 2018. Single-family home prices are setting new records nearly every week, and average listing prices through the first half of May are up over 8 percent over the year-ago period, hitting $297,000. If the growth continues, it’s only a matter of weeks before average house prices zoom through the $300k mark.
Homes are getting snapped up at a frenetic pace. Buyers hoping to get a crack at the action need to have their ducks in a row when they put in an offer. Homes are spending 32 fewer days on the market than they were just six years ago, according to data from Realtor.com. 39 of the top 50 markets are reporting the shortest time-on-market numbers since the organization began tracking in 2012, says Realtor.com’s Director of Economic Research Javier Vivas.
Nationwide, the sheer number of homes being listed is on the market. The current price boom is based on more than scarcity: May saw some 557,000 new listings, up 8 percent compared to April and up 2 percent compared to the year-ago period. Total inventories were up by 6 percent compared to April and up 4 percent compared to a year prior.
Furthermore, the hot market is no longer dominated by California anymore. The housing boom is broad and includes more than just a few gateway cities along the coasts. The hottest market, according to Realtor.com’s researchers? Midland, Texas – a mid-sized oil town that has taken top honors for the second month in a row.
To consider using your Self-Directed IRA here are the current top 10 cities:
- Midland, TX
- Boston, MA
- San Francisco, CA
- Columbus, OH
- Vallejo, CA
- Boise City, ID
- Stockton, CA
- Buffalo, NY
- Grand Rapids, MI
- Fort Wayne, IN
So, you do not have to play in Silicon Valley or Manhattan Real Estate to do well. In fact, there are reasons to avoid those markets and concentrate on small and mid-sized towns: There is more room for growth, as rental yields – rent incomes divided by sales prices – are much more reasonable as you get into middle America and away from the marquee cities. This is a much more stable platform for growth, in the long run – and better yields means you get paid to wait.