Home prices are on the rise so far this year in most Opportunity Zones around the country, with prices in the Midwest leading the way.
The median single-family home and condo prices climbed in the second quarter from the quarter before in more than 57 percent of the 3,162 Opportunity Zone census tracts analyzed by real estate data provider Attom, which looked at zones that had at least five sales in the second quarter.
Values year over year grew in just more than half of the 3,432 tracts with enough data that Attom studied.
However, this share was smaller than the rest of the U.S., as values increased in 56 percent of tracts that are not in Opportunity Zones compared to the same time last year, according to Attom.
The states with the highest share of zones that saw prices rise year over year were in the Midwest. For instance, the median home price rose in 68 percent of Wisconsin’s zones, the highest share in the country. Indiana (65 percent), Iowa (65 percent), Michigan (64 percent) and Missouri (59 percent) followed.
Coastal zones saw the highest median prices in the second quarter. Downtown Brooklyn in Kings County led the pack, where the median home price was $3.2 million, where the median household income for that census tract is about $168,000. One-third of the top 10 zones are in Kings County, though 60 percent are in California.
Here is a closer look at the Opportunity Zones with the highest median home prices in the second quarter:
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Across the country, home prices are at the highest they have ever been, and affordability remains an issue for buyers.
Opportunity Zones are not excluded from the trend: More than 8 percent of Opportunity Zones with enough data to analyze had the highest median prices in the second quarter since at least 2008. However, there are signs that this growth in home prices nationally is cooling, and buyers are gaining more leverage over sellers in negotiations.
The 2017 Tax Cuts and Jobs Act created Opportunity Zones in an effort to incentivize economic development in distressed regions throughout the country by offering tax benefits to investors in those communities.
There are nearly 8,800 such zones in the U.S., and the home prices in these areas are lower than national prices. In the second quarter, the median home price for homes in Opportunity Zones was $225,000, while the national median was $369,000.