Median home prices rose annually by more than the national average of 8.3% in nearly half of low-income areas with certain tax advantages, according to Attom Data Solutions.
What’s more, 46% of those zones had home prices below $150,000, down 1 percentage point from the second quarter. The tax breaks from the Tax Cuts and Jobs Act of 2017 incentivize investors to support Opportunity Zone development — with a goal of building affordable housing in low-income urban and rural communities in poor census tracts across the U.S.
Within the zones, 87% of homes had prices under the median of their individual markets, while about 31% had median prices under the 50th percentile of their surrounding metro areas. However, 13% had values above the median sales price of their housing market.
“The nationwide home-price surge in the third quarter spread through so-called Opportunity Zones, much as it did the rest of the country,” Todd Teta, chief product officer with Attom Data Solutions, said in a press release. “Despite sitting in some of the nation’s poorest areas, Opportunity Zones were hardly immune from a housing boom heading into its ninth year. That’s encouraging news for people living in those communities as well as investors looking to take advantage of the Opportunity Zones program.”
Wyoming led all states with 17% of census tracts meeting Opportunity Zone eligibility, followed by Mississippi with 15%, Washington, D.C., with 14% and Alabama with 13%. A total of 10% of all tracts qualify across the country. California led all states by number of zones with 477, followed by Florida‘s 332 and Texas’s 293.
Attom based its report on 3,658 zones with at least five home sales in the third quarter of 2019 as well as an average of at least five sales per quarter since the start of 2005.