New data from Attom has revealed that median home prices increased in more than half of Opportunity Zones earmarked by Congress for economic redevelopment during the second quarter.
Opportunity Zones, a bipartisan-proposed initiative signed into law by then-President Donald Trump through the Tax Cuts and Jobs Act of 2017, are federally designated lower income land tracts that offer tax benefits to investors who put money into them to spark economic revival. There are more than 8,700 Opportunity Zones nationwide; for the purposes of its study, Attom evaluated 3,904 with at least five home sales in the second quarter.
Attom found that 61% of analyzed zones saw single-family home and condo prices rise quarter over quarter, with 62% of zones posting price gains year over year. In nearly half of Opportunity Zones, median prices jumped by more than 10% quarterly and annually.
Home prices within Opportunity Zones have largely mirrored fluctuations within the broader housing market for at least the last three years, Attom noted. But by some metrics, price trends in the zones have outpaced the country as a whole. For example, the share of Opportunity Zones with gains in median home values surpassed the share of local housing markets outside the zones that saw median home values rise.
“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.”
It’s worth noting that most Opportunity Zones still have typical home values that are easily short of non-Opportunity Zone areas. Eighty percent of zones had median Q2 home prices that were less than the $365,000 nationwide median price. Nearly half of zones had median prices under $200,000.
Price gains in the second quarter disproportionately affected zones with higher home prices. Of Opportunity Zones where homes typically sold for less than $125,000 during the second quarter, just 45% logged price increases quarterly and annually. At least 60% of zones with higher home values saw price gains over the same timeframe.
