According to new research from ATTOM Data Solutions, nearly half of all opportunity zone redevelopment regions have seen yearly price increases of at least 20%. Home values in opportunity zones are rising in lockstep with the broader housing market in the United States.
The Tax Cuts and Jobs Act of 2017 established opportunity zones to aid in the revitalization of low-income communities by providing investors with considerable tax incentives over several years. Over 8,700 towns across the country have been classified as potential opportunity zones for regeneration.
In 62 percent of the 5,402 opportunity zones studied by researchers, median single-family home and condo prices increased from the second to the third quarter. Nonetheless, in most cities, housing values in opportunity zones lag much behind those in neighboring neighborhoods.
In the third quarter, 36 percent of the zones studied had median prices of less than $150,000, while 17 percent had median prices ranging from $150,000 to $199,000.
“As the housing market boom continued to lift fortunes just about everywhere,” says Todd Teta, chief product officer at ATTOM. “Values in markets scattered through so-called opportunity zones kept rising at around the same pace seen in more upscale areas.” “Relative to other places, home values in opportunity zones are still quite low. However, the continued gains revealed that a large number of households are purchasing in those locations, which should entice investors hoping to take advantage of Opportunity Zone tax benefits.”
The Areas Seeing the Most Growth
According to experts, the Midwest (60 percent) had the most opportunity zone tracts with a median price of less than $150,000, followed by the South (42 percent), the Northeast (35 percent), and the West (5 percent).
Meanwhile, the states with the highest percentage increases in median prices year over year in the third quarter were Idaho (where median prices in opportunity zones increased by 97 percent), Arizona (94 percent), Massachusetts (91 percent), Delaware (90 percent), and Utah (90 percent) (89 percent).