Homes in “Opportunity Zones,” established by Congress in the Tax Cuts and Jobs act of 2017, are cheaper than the average home, according to a report from ATTOM Data Solutions. The report found that roughly 80% of these zones had median home prices in the Q2 2019 that were below the national figure of $266,000, and that half had median prices of less than $150,000.
Additionally, Compared to the surrounding regions, median Q2 2019 prices in about one in four zones were less than 50% of the typical value in the Metropolitan Statistical Areas where they exist. Within Opportunity Zones, 86% had median Q2 2019 sales prices that were less than the median sales price for the surrounding Metropolitan Statistical Area (MSA). Roughly 26% had median sales prices less than half the figure for the MSA. Only 14% had median sales prices that were equal to or above the median sales price in the MSA.
“Opportunity Zones are among the poorest areas of the country, with some of the lowest home prices. This should come as no surprise because the zones are designed to be in or alongside economically distressed neighborhoods,” said Todd Teta, Chief Product Officer with ATTOM Data Solutions. “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.”
States that had the highest percentage of Opportunity Zone tracts with a median price less the half the MSA figure included Alabama (55%), Pennsylvania (53%), Illinois (51%), Ohio (47%) and Georgia (45%). States with the smallest percentages included Washington (1%), Nevada (3%), Oregon (4%) Colorado (4%) and Indiana (4%).
Regionally, the Midwest had the highest rate of Opportunity Zone tracts with a median home price of less than $150,000 (73%), followed by the South (57%), the Northeast (53%) and the West (13%). The Midwest also had the highest percentage of Opportunity Zone tracts where the median price was less than that of surrounding MSAs (89%), followed by the Northeast (87%), the South (85%) and the West (85%).