Opportunity Zone Housing Markets Rebound: ATTOM
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Median single-family home and condo prices increased from the first quarter to the second in 61 percent of Opportunity Zones around the country, according to ATTOM, Irvine, Calif.
Median single-family home and condo prices increased rose at least 5 percent in about half of Opportunity Zones, ATTOM said in its Q2 Opportunity Zones report.
The increases reversed a brief fallback in values during the prior two quarters in a majority of Opportunity Zones, which sit in and around low-income neighborhoods where the federal government offers tax breaks to spur economic revival.
The report noted the renewed price growth continued a long-term pattern of trends in Opportunity Zones largely matching those in other neighborhoods around the U.S. Values in those areas also dipped from late 2022 into early 2023 before recovering in the second quarter. “Changes in home values inside Opportunity Zones have been tracking closely with national patterns for at least the last three years – mostly rising in a sign of economic strength inside some of the country’s most distressed communities,” ATTOM said.
In fact, Opportunity Zone markets showed signs of rebounding slightly better than other neighborhoods around the country by two key measures, ATTOM reported. Median prices inside those zones rose more often at a faster pace than the nationwide gain both quarterly and annually.
“Another quarter and another sign of housing market strength. That was the story yet again in Opportunity Zones around the U.S. during the Spring buying season of 2023,” ATTOM CEO Rob Barber said. “It doesn’t seem to matter whether the national market is booming or cooling off. Prices are rising or falling at about the same pace inside Opportunity Zones as they are elsewhere around the U.S. – and even doing a little better in some ways. For sure, prices remain low in Opportunity Zones. But once again, home value trends present a positive note for investors considering using federal tax breaks offered to redevelop neighborhoods in need of revival.”
As they have for many years, typical home values in Opportunity Zones remain well below those in most other neighborhoods around the nation. Median second-quarter prices were less than the U.S. median of $350,000 in 80 percent of Opportunity Zones analyzed. In addition, median prices remained less than $200,000 in 49 percent of the zones during the second quarter, ATTOM noted.
Opportunity Zones also continue to display considerable price volatility, with median values either dropping or increasing by at least 5 percent in two-thirds of those locations between the first quarter and the second. That likely reflected the small number of sales in many zones, ATTOM said.
“Opportunity Zones appear to still be enjoying the trickle-down effect of value spikes in mid-level markets that have likely priced marginal buyers out,” Barber said. “With an ongoing tight supply of homes for sale pushing the trends even more throughout the country, there are no major signs that Opportunity Zones price patterns will fall out of step with the national scenario in the near future.”
