Federally designated Opportunity Zones are not immune to the nationwide trends of rising mortgage rates and shrinking inventory that have pushed up home prices. In fact, these areas are closely tied to broader trends.
According to the latest report from real estate data provider to usIn the second quarter of 2024, in nearly 50% of opportunity areas with at least 5 home sales, median home values increased by more than 10% on a quarterly and full-year basis.
Prices increased in 62% of opportunity zones compared to Q2 2023, and in 61% of them compared to Q1 2024.
“The trickle-down effects of the housing boom across the United States continue to lift many communities in need, revealing their economic potential,” Attom CEO Rob Barber said in a statement.
“This pattern is particularly evident in Opportunity Zones, as homebuyers in higher-priced areas move to where they can afford it. While gains vary within these zones, prices are rising in many, suggesting provide the momentum necessary to attract the investment that the Opportunity Zone model is designed to generate.
The Opportunity Zone program was created under the Trump-era Tax Cuts and Jobs Act of 2017. U.S. Census Bureau The program’s methodology considers disadvantaged areas.
Because discretion is required, investments may be uneven and lead to uneven results. The report explains that the areas with the biggest value increases are in areas with higher house prices, while the lowest-priced markets are less affected.
Attom said trends in the second quarter of 2024 were closely tied to the broader housing market, as they have been for at least the past three years.
To that end, states with the highest proportion of Opportunity Zones where home prices are rising on a quarterly basis tend to be states where housing costs are already high. Leading the way are Massachusetts (73%), Maryland (68%), Oregon (68%), New York (67%) and Virginia (65%).
States with the lowest share of opportunity zones for price increases include Georgia (50%), Louisiana (53%), Minnesota (56%), Kentucky (56%) and California (56%).
