2012 Real Estate Trends

Real estate enjoyed a strong year in 2012, and you can take advantage of this asset class in a tax-advantaged, self-directed IRA.

Building Permits

One leading indicator of the U.S. real estate market that surged in 2012 was building permits. Data provided by the U.S. Census Bureau indicated that 813,400 permits were approved during the year. This figure represented a premium of more than 30 percent over the 624,100 building permits authorized in 2011.

Housing Starts

The number of housing units that were actually started also surged during the year, spiking 28.1 percent to 780,000 in 2012, up from the figure of 608,800 during the year before, according to additional data from the U.S. Census Bureau..

Reverse Mortgage Daily reports that the construction sector is still weaker than usual even though these starts rose in 2012. Data provided by the U.S. Department of Housing and Urban Development reveals that there was an average of 1.4 million housing starts per year between 1990 and 2011. Compared to this figure, 2012 is down 43 percent.

Home Sales

Home purchases are also on the rise.

Data provided by the National Association of Realtors (NAR) indicated that the number of homes sold in 2012 was the highest in five years. A total of 4.65 million homes were sold in 2012, according to preliminary annual data provided by the NAR. This represented 9.2 percent more than the 4.26 million sales in 2011.

Prices also rose during 2012, with the median price of existing homes rising 6.3 percent from the year before. This figure represented the strongest annual increase since 2005.

NAR chief economist Lawrence Yun attributed the improvement in the housing market to the pent-up demand of buyers.

"The number of potential buyers who stayed on the sidelines accumulated during the recession, but they started entering the market early last year as their financial ability and confidence steadily grew, along with home prices," he stated. "Likely, job creation and household formation will continue to fuel that growth. Both sales and prices will again be higher in 2013."

Growth by City

Data compiled by real estate information provider Zillow indicated that most cities enjoyed strong improvement. A wide range of cities enjoyed price gains. Home prices in 69 percent of the 366 total metro areas involved in the report increased during the year.

The city that enjoyed the strongest gains was Phoenix, where homes surged 22.5 percent in value. Of the top 30 metro areas, seven enjoyed appreciation of 10 percent or more.

Data contained in the Zillow Home Index revealed that San Jose, California surged 15.4 percent in value, and San Francisco spiked 14 percent. Las Vegas also enjoyed strong performance, gaining 13.9 percent.

"We expected 2012 to be a good year for housing, and it delivered in spades. Strong demand paired with limited inventory in many markets helped fuel a robust and often rapid recovery in overall home values, good news for homeowners after years of poor performance," Zillow chief economist Dr. Stan Humphries said in the statement. "Buying a home should be a long-term decision, and these swings between a deep housing recession and higher-than-normal appreciation rates can give consumers whiplash and cause some to lose sight of that."

Harness This Opportunity

If you want to invest in real estate and potentially benefit from robust appreciation, you can do so with a self-directed IRA, which will provide you with tax benefits in the process. Opening one of these self-directed, tax-advantaged savings accounts will give you the ability to invest in real estate in many forms, including tax liens and commercial or residential buildings.