Opportunity Zone Home Prices On The Rise MABA MassachusettsRealEstate FirstTimeHomeBuyers MaBuyerAgent

Home prices in Opportunity Zones across the United States continued to climb in the second quarter of 2024, with median values rising in more than half of the areas targeted for economic redevelopment, according to a new report from ATTOM Data, a real estate data firm. The analysis, which looked at three thousand nine hundred and four Opportunity Zones with sufficient data, revealed that median home prices increased from the first to the second quarter in sixty one percent of these zones, with annual gains recorded in sixty two percent. 

The rise in prices inside Opportunity Zones a key component of the Tax Cuts and Jobs Act of 2017 aimed at spurring economic revival in low-income neighborhoods mirrors the broader national market trends seen during the spring home-buying season. Nearly half of the zones analyzed saw median prices shoot up by more than ten percent on a quarterly and annual basis. 

“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 Rob Barber, CEO of ATTOM. “This pattern is especially evident in Opportunity Zones as house hunters priced out of more-expensive areas turn to places they can afford.” 

Despite these gains, most Opportunity Zones still had typical home values that were significantly lower than the national median. In the second quarter, eighty percent of the zones had median prices below the U.S. median of three hundred and sixty five thousand dollars, with almost half reporting values under two hundred thousand dollars. 

Regional variations and state trends

The report highlighted significant regional variations, with higher-priced Opportunity Zones experiencing more substantial gains than lower-priced areas. In the Midwest, sixty one percent of zones had median home prices below one hundred and seventy five thousand dollars, the highest proportion of low-cost zones among U.S. regions. 

States with the largest portions of zones where median prices increased quarterly included Massachusetts (seventy three percent), Maryland (sixty eight percent), Oregon (sixty eight percent), New York (sixty seven percent), and Virginia (sixty five percent). In contrast, states like Georgia (fifty percent), Louisiana (fifty three percent), and California (fifty six percent) saw more modest increases. 

On an annual basis, New Jersey led the way, with eighty one percent of its Opportunity Zones reporting median price increases, followed by Nevada (seventy nine percent) and Ohio (seventy three percent). 

Opportunity zones outperform national market in some areas

In a notable trend, forty five percent of Opportunity Zones outpaced the national nine percent median home price increase from the first to the second quarter of 2024, a higher proportion than in local housing markets outside these zones. 

However, the report also pointed out that price gains were less consistent in zones where homes typically sold for less than one hundred and twenty five thousand dollars. In these lower-priced areas, only forty five percent of zones saw quarterly and annual price increases, compared to sixty to sixty six percent of zones with higher home values. 

High-level findings from the report:

• Median prices of single-family homes and condos increased from the first to the second quarter of 2024 in one thousand nine hundred and thirty two (sixty one percent) of the Opportunity Zones around the U.S. with sufficient data to analyze, while staying the same or decreasing in thirty nine percent. Measured annually, medians remained up from the second quarter of 2023 to the same period this year in two thousand one hundred and forty (sixty two percent) of those zones. (Among the three thousand nine hundred and four Opportunity Zones included in the report, three thousand one hundred and eighty five had enough data to generate usable median-price comparisons from the first to the second quarter of 2024; three thousand four hundred and fifty six had enough data to make comparisons between the second quarter of 2023 and the second quarter of 2024). 

• Opportunity Zones did even better than the rest of the nation when comparing price changes to shifts in the national median home price. Median values in forty five percent of Opportunity Zones went up from the first to the second quarter of this year by more than the nine percent annual gain nationwide. The same was true in slightly less forty one percent of local housing markets outside the zones. (A similar pattern emerged when comparing shifts in prices annually.) 

• However, median prices were up quarterly and annually in only about forty five percent of Opportunity Zones where homes commonly sold for less than one hundred and twenty five thousand dollars during the second quarter of 2024. Prices climbed during that time frame in sixty to sixty six percent of zones with higher home values. 

• Among states that had at least twenty five Opportunity Zones with enough data to analyze during the second quarter of 2024, the largest portions of zones where median prices increased quarterly were in Massachusetts (medians up from the first to the second quarter of 2024 in seventy three percent of zones), Maryland (sixty eight percent), Oregon (sixty eight percent), New York (sixty seven percent) and Virginia (sixty five percent). States where prices were up quarterly in the smallest portion of zones included Georgia (median prices up in fifty percent of zones), Louisiana (fifty three percent), Minnesota (fifty six percent), Kentucky (fifty six percent) and California (fifty six percent). 

• States where median home values in Opportunity Zones remained up most often year over year included New Jersey (median prices up annually in eighty one percent of zones), Nevada (seventy nine percent), Ohio (seventy three percent), New Mexico (sixty nine percent) and Virginia (sixty nine percent). 

• Of the three thousand nine hundred and four zones in the report, one thousand one hundred and forty eight (twenty nine percent) had median prices below one hundred and fifty thousand dollars in the second quarter of 2024. That was down from thirty four percent of zones with sufficient data a year earlier and almost sixty percent five years ago. Another six hundred and forty seven zones (seventeen percent) had medians in the second quarter of this year ranging from one hundred and fifty thousand to one hundred and ninety nine thousand nine hundred and ninety nine dollars. 

• Median values in the second quarter of 2024 ranged from two hundred thousand to two hundred ninety nine thousand nine hundred and ninety nine dollars in twenty three percent of Opportunity Zones, while they topped the nationwide second-quarter median of three hundred and sixty five thousand dollars in just twenty percnet. 

• The Midwest continued in the second quarter of 2024 to have larger portions of the lowest-priced Opportunity Zone tracts. Median home prices were less than one hundred and seventy five thousand dollars in sixty one percent of zones in the Midwest, followed by the Northeast (forty one percent), the South (thirty nine percent) and the West (five percent). 

Click here for the entire report. 

The post Opportunity Zone Home Prices Rise During Q2 2024 first appeared on The MortgagePoint.

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