DSNews delivers stories, ideas, links, companies, people, events, and videos impacting the mortgage default servicing industry.
Issue link: http://digital.dsnews.com/i/1536040
67 June 2025 J O U R N A L June 2025 » The first-quarter patterns were mixed, with typical values rising signifi- cantly more frequently in higher-priced zones than in the absolute lowest-priced neighborhoods, even while prices in most Opportunity Zone regions con- tinued to grow year over year. The U.S. housing market's very bottom continued to exhibit more notable weakness, indi- cating that those regions are benefiting the least from growing property values and may be more at risk if the overall market upswing pauses. However, the most recent trends indi- cate that, in comparison to other markets across the country, some of the most troubled areas are exhibiting economic strength—or at least limited deteriora- tion. Throughout Q1 2025, Opportunity Zones continued to experience even higher price trends than the national av- erage by a number of significant metrics. In all 50 states, the District of Columbia, and U.S. territories, census tracts in or next to low-income commu- nities that satisfy specific requirements for redevelopment are designated as Opportunity Zones under the Tax Act legislation. According to the U.S. Census Bureau, census tracts are regions having 1,200–8,000 inhabitants, with an average of roughly 4,000. Among states that had at least 25 Opportunity Zones with enough data to analyze during Q1 2025, the largest portions of zones where median prices increased annually were in: 1. Indiana (medians up from Q1 2024 to Q1 2025 in 75% of zones) 2. New York (72%) 3. Missouri (70%) 4. Colorado (69%) 5. New Jersey (65%) States where prices were up annually in the smallest portion of zones included: 1. Nevada (median prices up in 44% of zones) 2. Washington (49%) 3. Florida (49%) 4. Iowa (52%) 5. Tennessee (52%) In the first quarter of 2025, 1,097 (31%) of the 3,558 zones in the report had medi- an prices below $150,000. That repre- sented a decrease from 5 years ago, when 57% of zones had adequate data, and from 34% a year earlier. In the first quar- ter of this year, the medians for another 556 zones (16%) ranged from $150,000 to $199,999. Some 20% of Opportunity Zones had median values in Q1 2025 that were higher than the national median of $355,000, while 24% had median values ranging from $200,000 to $299,999. "The home-buyer money flowing into these communities shows endur- ing potential for them to turn around, providing solid foundations for investors looking to use the Opportunity Zone incentives," Barber said. In the early months of 2025, average property values in large areas of Op- portunity Zones remained significantly lower than those in the majority of the country, despite differing degrees of eco- nomic hardship. In 80% of the zones with sufficient data, the median first-quarter prices were less than the median of $355,000 in the United States That was roughly the same amount as it has been since 2020. Additionally, in nearly half of the zones, median prices stayed below $200,000. Significant price volatility persisted within Opportunity Zones as well, with median prices in almost three-quarters of those areas either declining or rising by at least 5% between late 2023 and early 2024. Once more, that probably represented the low volume of sales in numerous zones. Overall, however, the most recent Opportunity Zone trends still closely fol- lowed the national home price trajectory in the first several months of 2025. EXISTING-HOME SALES SLOW AMID WEAKENED BUYER DEMAND A ccording to the National Association of Realtors (NAR), existing-home sales decreased in April. The Midwest had growth in sales, the South saw no change, and the Northeast and West saw declines. Three regions saw a fall in sales year over year (YoY), while the Northeast saw no change. "Home sales have been at 75% of normal or pre-pandemic activity for the past three years, even with seven million jobs added to the economy." —Lawrence Yun, Chief Economist at NAR.