Average home prices in Opportunity Zones came in at $163,746 YTD in Q2 2018, according to ATTOM Data Solutions. In the remaining US, average home prices came in at $287,150. Big difference, right?
Here are the average and Opportunity Zone home prices for Q2 2018 in the three Amazon HQ2 markets:
Nashville
Opportunity Zone average home price – $92,190
Average home price – $280,261
This is a 67% difference.
New York – Northern New Jersey
Opportunity Zone average home price – $341,774
Average home price – $695,544
This is a 51% difference.
West Washington DC
Opportunity Zone average home price – $362,413
Average home price – $520,39
This is a 30% difference.
According to ATTOM Data Solutions senior vice president, Daren Blomquist, “The new Opportunity Zones created by tax reform legislation passed in December 2017 provides real estate investing with prime tax incentives investing opportunities, particularly if investors can find zones that are in the path of progress. The newly announced Amazon HQ2 markets certainly qualify as being in the path of progress.”
ATTOM analysts looked at housing characteristics, home values and price appreciation for 7.4M residential properties in 3,000 Opportunity Zones. Those analysts found that the average home price in all Opportunity Zones through September 2018 was $163,746, 43% below the home average price of $287,150 outside of Opportunity Zones.
The crux of the matter? Even though homes in Opportunity Zones are selling at a discount, those Opportunity Zone homes appreciated faster over the last 5-year period by 72% compared to the appreciation rate of 46% outside of Opportunity Zones. A 72% home appreciation rate for homes inside Opportunity Zones nationally compared to a 46% home appreciation rate for homes outside Opportunity Zone nationally is a no-brainer comparison.
Even the supply of non-owner-occupied homes is higher inside Opportunity Zones than outside those zones. Nationally, 37% of single-family homes and condos are non-owner occupied inside Opportunity Zones; 24% of single-family homes and condos are non-owner occupied outside Opportunity Zones. In Washington DC the comparison is between 25.2% inside Opportunity Zones non-owner occupied units to 16.7% outside Opportunity Zones non-0owner occupied units. In New York and North New Jersey, the comparison is 32.5% to 20.7%. In Nashville, the comparison is 36.7% to 23.6%. Again, a no-brainer comparison.
And lastly, in Q2 2018, the average property tax on single-family homes and condos inside Opportunity Zones was $1,918, 41% lower than the average property tax of $3,248 outside Opportunity Zones.
To summarize, if you and/or your clients are considering investments in residential properties inside Opportunity Zones within Amazon HQ2 markets, you and/or your clients will have favorable advantages going for you in terms of home values, home appreciation rates, supply and property taxes.
