Opportunity Zone Prices Are a Fraction of Nearby Property Costs
August 29, 2019
Nearly half of the median home prices are below $150,000 in federally designated opportunity zones, new tax breaks that are aimed at jumpstarting improvement in low-income areas, according to a new analysis from ATTOM Data Solutions, a real estate data firm.
Opportunity zones were established by Congress in the Tax Cuts and Jobs Act of 2017 and offers tax incentives for those who purchase and invest over time in flagged areas that are in need of economic recovery. ATTOM Data researchers recently analyzed nearly 3,100 zones that have sufficient sales data.
Researchers found that about 80% of the opportunity zones had a median home price well below the national figure of $266,000 in the second quarter. Half of the zones had median prices of less than $150,000. The median second-quarter price in about one in four of the zones was less than 50% of the typical value in the surrounding metro areas.
The states that had the highest percentage of opportunity zones with a median price less than half of the nearby metro area included Alabama, Pennsylvania, Illinois, Ohio, and Georgia, according to the analysis.
The Midwest overall had the highest rate of opportunity zone tracts with a median home price of less than $150,000 at 73%, followed by the South (57%), the Northeast (53%), and the West (13%).
“Opportunity zones are among the poorest areas in the country, with some of the lowest home prices,” says Todd Teta, chief product officer with ATTOM Data Solutions. “This should come as no surprise because the zones are designed to be in or alongside economically distressed neighborhoods. But the differences between these and other areas in most parts of the nation are stark. The numbers provide key benchmarks for how much room there is for these areas to grow and how much new investment they need.”
Of the 3,073 designated opportunity zones in the country, California has the most at 374, followed by Florida (317), Texas (164), Pennsylvania (154), North Carolina (145), and Tennessee (138).
Updated: July 10, 2020