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Investor Insights Blog|Top 10 Most Expensive States for Real Estate in Self-Directed IRAs

Real Estate

Top 10 Most Expensive States for Real Estate in Self-Directed IRAs

Despite the skyrocketing real estate prices in many areas of the country, retirement investors were able to find affordable properties for their IRAs in 2021.

Equity Trust clients investing in real estate in their IRAs or other accounts paid an average of nearly $119,000 in 2021, up from $99,000 in 2020, according to the 2022 Self-Directed Real Estate Market Report. This average purchase price is well below the national median sale price – nearly $412,000 – for all home sales in 2021, as reported by Zillow.

Our clients’ comparatively low average purchase amount suggests that real estate IRA investors may not have a lot of capital to get started are finding more affordable options that enable them to participate in the market with their retirement accounts.

Where did investors pay the most for real estate in their IRAs 2021?

Looking at data on a state level, median purchase prices ranged from $25,000 to just over $300,000.

It may not be surprising to see that Hawaii tops the list of most expensive states for Equity Trust clients’ real estate investments at $301,000. Following Hawaii are Washington, DC with a $253,000 median price and Utah at $208,000.

Here are the most expensive states for self-directed real estate investors in 2021.

Top 10 States for Real Estate Prices for Equity Trust Investors

By Median Purchase Price

1. Hawaii – $301,000
2. Washington, DC – $253,000
3. Utah – $208,000
4. Washington – $188,000
5. South Dakota – $169,000
6. Vermont – $168,000
7. Arizona – $151,000
8. Massachusetts – $129,200
9. Wyoming – $129,000
10. Rhode Island – $125,000

On the other end of the spectrum, New Jersey real estate purchases were the least expensive of any state, according to median price, at just $25,000.

Some may be surprised to find California on the Bottom 10 Prices list, with a $39,000 median purchase price among Equity Trust IRA investors. Comparatively, among all buyers – not just Equity Trust clients – California’s median home price was $796,570 in December 2021, according to the California Association of Realtors.

Check out the rest of the list of low real estate investment median prices:

Bottom 10 States for Real Estate Prices for Equity Trust Investors

By Median Purchase Price

1. New Jersey – $25,000
2. West Virginia – $31,000
3. Louisiana – $33,000
4. Alaska – $34,000
5. California – $39,000
6. New Mexico – $40,000
7. Arkansas – $45,000
8. Iowa – $46,000
9. Michigan – $47,000
10. Nebraska – $50,000

2022 Self-Directed Real Estate Market Report

Self-Directed Real Estate Market ReportWant more information on purchase prices by region or year? Get this and many more insights about where and how Equity Trust real estate investors are buying real estate, as well as real estate-backed notes, in our annual report.

Download the 2022 Self-Directed Real Estate Market Report to discover:

  • Where IRA investors are investing in real estate
  • Average purchase prices by state, region, and year
  • States with the most out-of-state real estate purchases
  • How much interest investors are receiving for real estate notes
  • Much more

Access the Free Report Now

 

1

Can my IRA purchase real estate that I currently own?

No. This is considered a prohibited transaction (see IRC 4975). You may not purchase a property, or interest in a property, that’s currently owned by a disqualified person, which includes yourself.

2

Am I restricted to only purchasing residential property with my IRA?

You are not limited to residential real estate. Your IRA can hold various investment properties such as commercial buildings, vacant land, condominiums, mobile homes and apartment buildings, in addition to residential property.

Master Academy Real Estate Course


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