Napa home prices in Opportunity Zones higher than average

Most homes located in Opportunity Zones sell for below the national median price. So reported a property data provider after analyzing home sale prices in Opportunity Zones across the U.S., including Napa's two Opportunity Zones.

However, Napa home prices were the exception.

In the report, the company, Attom Data Solutions, looked at nearly 3,100 Opportunity Zones.

Opportunity Zones offer significant tax breaks to investors who fund new developments, such as housing or commercial projects, or fund new businesses in designated zones. According to Attom, roughly 80% of those zones had median home prices in the second quarter of 2019 that were below the national figure of $266,000. Half had median prices of less than $150,000.

Data from Napa's two Opportunity Zones told a different story.

Napa County has two such zones: one in downtown Napa and one in Napa's Westwood neighborhood west of Highway 29. The median sale price of the six homes sold in the second quarter 2019 in downtown Napa's Opportunity Zone was $799,500, said the report.

The median sale price of the 14 homes sold in Napa's Westwood Opportunity Zone area during that same time was $485,000.

Napa, Calif.
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That matches data from the report that noted among Opportunity Zones with at least 10 sales in each of the five latest quarters, 41 had second quarter 2019 medians of $400,000 or more.

They included areas of King County, Wash., Denver County, Colo., Coconino County, Ariz., Deschutes County, Ore., the city of Napa and Alameda and Contra Costa counties in California.

At the opposite end, 50 zones had second quarter 2019 medians of less than $50,000. They included areas of Philadelphia, Baltimore, Montgomery, Ala., Duval County, Fla., and Jefferson County, Ala.

How do Opportunity Zones work?

Under the national program, investors can avoid paying federal capital gains taxes for seven years if they invest in an "opportunity fund," which backs projects in the newly created opportunity zones.

If they invest this year, they'll pay 15 percent less tax at the end of that seven-year period. And if they hold onto the opportunity zone investment for 10 years, they'll pay no tax on the profit.

To qualify as an opportunity zone, a neighborhood must have a poverty rate of at least 20% or a median family income that doesn't exceed 80% of the regional or statewide median income.

That may not sound like Napa but nonetheless, the state of California assigned the designation to the two areas in Napa.

Most "Opportunity Zones are among the poorest areas of the country, with some of the lowest home prices," said Todd Teta, chief product officer with Attom.

"This should come as no surprise because the zones are designed to be in or alongside economically distressed neighborhoods," he said.

"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," said Teta.

Other findings from the report include:

* States with the highest percentage of census tracts meeting Opportunity Zone requirements include Wyoming, Mississippi, Alabama, North Dakota and New Mexico. Washington, D.C., also is among the leaders. Nationwide, 10% of all tracts qualify.

* Among the 3,073 Opportunity Zones with sufficient data to analyze, California has the most, with 374, followed by Florida (317), Texas (164), Pennsylvania (154), North Carolina (145) and Tennessee (138).

* Of the tracts analyzed, 47% had a median price in the second quarter of 2019 of less than $150,000. The median ranged from $150,000 to $199,999 in 17%, from $200,000 up to the national median of $266,000 in 16% and more than $266,000 in 19%.

* Within Opportunity Zones, 86% had median second quarter 2019 sales prices that were less than the median sales price for the surrounding Metropolitan Statistical Area. Roughly 26 percent 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.

* States that had highest percentage of Opportunity Zone tracts with a median price less the half the MSA figure included Alabama, Pennsylvania, Illinois, Ohio and Georgia. States with the smallest percentages included Washington, Nevada, Oregon, Colorado and Indiana.

* Regionally, the Midwest had the highest rate of Opportunity Zone tracts with a median home price of less than $150,000.

Tribune Content Agency
Home prices Housing markets Real estate Attom Data Solutions California
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