More than half of the Opportunity Zones targeted for economic redevelopment around the U.S. saw median home price gains as price trends inside those zones continue to closely follow—and often outpace—national market patterns, according to the latest ATTOM report.
Opportunity Zones were created in 2017 by the Trump administration, providing tax incentives for developers to build much-needed housing units in “distressed” areas, defined as neighborhoods with high poverty and low incomes.
ATTOM’s Opportunity Zones Report for Q2 looked at 3,904 zones with at least five home sales in the quarter. The report found that median home prices increased from Q1 to Q2 in 61% of zones, and were up annually in 62% of the zones.
ATTOM reported that Opportunity Zones “did even better than the rest of the nation when comparing price changes to shifts in the national median home price.” The data showed that median values in 45% of zones went up from Q1 to Q2 by more than the 9% annual gain nationwide. The same was true in slightly less (41%) of local housing markets outside the zones.
“The trickle-down impact of the extended housing market boom across the U.S. continues to uplift many neighborhoods in need, revealing their economic potential,” said ATTOM CEO Rob Barber. “This pattern is especially evident in Opportunity Zones as house hunters priced out of more-expensive areas turn to places they can afford. While gains inside these zones vary, many are experiencing price increases, demonstrating the momentum necessary to attract the investments that the Opportunity Zone model is designed to generate.”
Most Opportunity Zones, as ATTOM reported, still had typical home values below those in other markets. Median second-quarter prices in 80% of the zones were less than the U.S. median of $365,000. That was about the same portion as in earlier periods over the past three years.
Breaking down that data further, the report stated that 29% of Opportunity Zones had median prices below $150,000, down from 34% of zones a year earlier and almost 60% five years ago. Another 17% of zones had medians ranging from $150,000 to $199,999. The range of $200,000 to $299,999 claimed 23% of zones, and the median of $365,000 claimed 20%.
Among states that had at least 25 Opportunity Zones with enough data to analyze, the report found that the largest portions of zones where median prices increased quarterly were in Massachusetts (73%), Maryland (68%), Oregon (68%), New York (67%) and Virginia (65%). In addition, the Midwest continued to have larger portions of the lowest-priced zone tracts. Median home prices were less than $175,000 in 61% of zones in the Midwest, followed by the Northeast (41%), the South (39%) and the West (5%).
For the full report, click here.
