Pre-COVID-19, Opportunity Zones See Strong Home Price Growth
ATTOM Data Solutions, Irvine, Calif., said more than two-thirds of homes in government-designated “Opportunity Zones” saw positive price growth in the first quarter—that is, before the economic effects of the coronavirus took effect.
The ATTOM analysis of 3,000 Opportunity Zones established by Congress in the Tax Cuts and Jobs act of 2017 found 45 percent saw median home prices rise by more than the national increase of 11.3 percent from first quarter 2019 to first quarter 2020, down slightly from the 47 percent of zones that bested the 9.4 percent annual change from fourth quarter of 2018 to the same period in 2019.
The report also said 78 percent of zones had median home prices in the first quarter of 2020 that were less than the national median of $265,900.
Todd Teta, Chief Product Officer with ATTOM, said data in the report forms the last snapshot of Opportunity Zone home prices before the major economic impact of the worldwide coronavirus pandemic.
“Home prices in designated Opportunity Zones around the country keep showing strong gains, tracking the housing market boom now in its ninth year,” Teta said. “Nearly half did even better in the first quarter of 2020 than the nation as a whole – a notable trend in some of the country’s most distressed neighborhoods.” said Todd Teta, chief product officer with ATTOM Data Solutions.
Teta noted the coronavirus “could cut the legs out from under the housing market. For now, though, home prices are going strong in Opportunity Zones, which offers significant hope to current and potential homeowners and investors.”
Key report findings:
–Median prices rose from first quarter 2019 to first quarter 2020 in 64 percent of Opportunity Zones. Of the 3,010 zones included in the report, 2,584 had enough data to generate usable median prices.
–Median prices in 45 percent of Opportunity Zones rose by more, year over year, than values increased nationally. The national median home price increased from first quarter 2019 to first quarter 2020 by 11.3 percent.
1,384 (46 percent) had a median price in first quarter 2020 that was less than $150,000 and 502 (17 percent) had medians ranging from $150,000 to $199,999. Another 467 (16 percent) ranged from $200,000 up to the national median price of $265,900 while 657 (22 percent) were more than $265,900. All percentages were similar to those in fourth quarter 2019.
–86 percent of Opportunity Zones had median first quarter 2020 sales prices that were less than the median values for the surrounding MSAs. Some 25 percent had median sales prices that were less than half the figure for the surrounding MSAs. Fourteen percent of the zones had median sales prices that were equal to or above the median sales price of the broader MSAs.