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Despite the many challenges in 2020, the real estate market recorded a new high not seen in well over a decade.
Existing home sales in 2020 reached their highest level since 2006, according to the National Association of Realtors (NAR). In December 2020 alone, sales were up more than 22 percent from December 2019.
There’s more good news for sellers: the median existing-home price recorded its 106th straight month of year-over-year gains. The median price for all housing types reached $309,800 in December, up nearly 13 percent from December 2019.
Home sales in the Northeast accounted for the greatest increase in sales, up 4.5 percent in December compared to November, and up more than 27 percent from December of the previous year.
Existing home sales should continue to rise into 2021, said NAR Chief Economist Lawrence Yun. Though mortgage rates are beginning to rise, they should remain relatively low, and other factors such as the economic stimulus and vaccine distribution should also help lift sales, he said.
The record home sales may result in low or overpriced inventory in areas. So, what if you’re a buyer – particularly one seeking an investment property?
Some investors have found success looking outside of their market. For example, investors from California and elsewhere have flocked to cities including Cleveland to purchase fix-and-flip houses at significantly lower prices than they’d find in their home state, allowing them to turn a bigger profit on the sale.
Many of these investors have used an unexpected funding source – their self-directed IRA – to fund the purchase. In this seller’s market, having the ability to use IRA funds to provide an attractive all-cash offer can be a huge competitive advantage.
Discover more about where IRA investors are purchasing property – access the 2021 Self-Directed Real Estate Market Report for details about Equity Trust clients and their self-directed real estate investments.
The report reveals insightful self-directed investor data including:
Can I use funds from my IRA to renovate property to sell it at a higher price?
I plan to purchase a rental property with my IRA. Does the rental income have to go back into my IRA?
Am I restricted to only purchasing residential property with my IRA?
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