Almost Half the Zones Have Median Home Prices Below $150,000
According to a new report by ATTOM Data Solutions -- qualified Opportunity Zones established by Congress in the Tax Cuts and Jobs act of 2017 -- found that 45 percent of the zones saw median home prices rise by more than the national increase of 11.3 percent from the first quarter of 2019 to the first quarter of 2020. That was down slightly from the 47 percent of zones that bested the 9.4 percent annual change from the fourth quarter of 2018 to the same period in 2019.
The report also shows that 78 percent of the zones had median home prices in the first quarter of 2020 that were less than the national median of $265,900. Data in the report forms the last snapshot of Opportunity Zone home prices before the major economic impact of the worldwide Coronavirus pandemic.
"Home prices in designated Opportunity Zones around the country keep showing strong gains, tracking the housing market boom now in its ninth year. Nearly half did even better in the first quarter of 2020 than the nation as a whole - a notable trend in some of the country's most distressed neighborhoods," said Todd Teta, chief product officer with ATTOM Data Solutions. "As with other recent ATTOM reports, this one needs to be taken in the context of the looming impact of the Coronavirus pandemic, which could cut the legs out from under the housing market. For now, though, home prices are going strong in Opportunity Zones, which offers significant hope to current and potential homeowners and investors."
High-level findings from the report include:
Median prices rose from the first quarter of 2019 to the first quarter of 2020 in 64 percent of Opportunity Zones with sufficient data to analyze. In 36 percent of zones, they declined or stayed the same. Of the 3,010 zones included in the report, 2,584 had enough data to generate usable median prices in both the first quarter of 2019 and first quarter of 2020.
Median prices in 45 percent of Opportunity Zones with sufficient data to analyze rose by more, year over year, than values increased nationally. The national median home price increased from the first quarter of 2019 to the first quarter of 2020 by 11.3 percent.
Among all 3,010 Opportunity Zones in the report, California had the most, with 389 zones, followed by Florida (295 zones), Georgia (148 zones), Texas (144 zones) and North Carolina (137 zones).
Of all zones in the report, 1,384 (46 percent) had a median price in the first quarter of 2020 that was less than $150,000 and 502 (17 percent) had medians ranging from $150,000 to $199,999. Another 467 (16 percent) ranged from $200,000 up to the national median price of $265,900 while 657 (22 percent) were more than $265,900. All percentages were similar to those in the fourth quarter of 2019.
In Metropolitan Statistical Areas with sufficient sales data to analyze, 86 percent of Opportunity Zones had median first quarter 2020 sales prices that were less than the median values for the surrounding MSAs. Some 25 percent had median sales prices that were less than half the figure for the surrounding MSAs. Fourteen percent of the zones had median sales prices that were equal to or above the median sales price of the broader MSAs.
The Midwest continued to have the highest rate of Opportunity Zone tracts with a median home price of less than $150,000 (76 percent), followed by the South (58 percent), the Northeast (45 percent) and the West (11 percent).