Opportunity Zone Home Prices Mixed: ATTOM

(Illustration courtesy of ATTOM)

Median single-family home and condo prices increased in the first quarter in just 49 percent of Opportunity Zones around the country, according to ATTOM, Irvine, Calif.

But prices were up year-over-year in almost two-thirds of Opportunity Zones with enough data to measure, ATTOM reported in its First-Quarter Opportunity Zone report.

Those trends, in and around low-income neighborhoods where the federal government offers tax breaks to spur economic revival, continued a long-term pattern of home values inside Opportunity Zones moving alongside broader nationwide shifts for at least the last three years, the report noted.

“Another quarter, same result. That’s the takeaway yet again inside Opportunity Zones around the U.S., where home prices still lag far behind national numbers, but gains and losses mostly keep tracking overall market patterns,” ATTOM CEO Rob Barber said. “Clearly, there are exceptions, especially at the lowest end of the price scale. Nevertheless, the latest data shows Opportunity Zone housing markets continuing to attract considerable interest among home buyers pushed out of higher-priced areas in a market with very limited supplies of homes for sale.”

Barber said that date points to the kind of economic viability needed to lure investors who may want to take advantage of the redevelopment incentives aimed at revitalizing those communities.

The mixed first-quarter price patterns hit harder in the very lowest-priced areas, with declining values posing a warning sign in those markets, ATTOM said. “Nevertheless, the overall picture inside Opportunity Zones revealed ongoing measures of economic strength, or limited weakness, inside some of the country’s most distressed communities compared to other markets around the country,” the report said. “That scenario has remained in place even as a decade-long housing market boom has slowed in Opportunity Zones and elsewhere, with relatively modest price increases over the past year.”

By one key measure, Opportunity Zones price trends even showed continued signs again of doing somewhat better than the nation as a whole during the early months of 2024, the report noted. “For example, changes in typical home values across more than half of Opportunity Zones were better than nationwide price movements both quarterly and annually,” it said.

Some high-level findings from the report:

Median prices of single-family homes and condominiums increased from the fourth quarter of 2023 to the first quarter of 2024 in 49 percent of the Opportunity Zones around the U.S. with sufficient data to analyze, while staying the same or decreasing in 51 percent. Measured annually, medians remained up from the first quarter of 2023 to same period this year in 62 percent of those zones.

Opportunity Zones did even better than the nation as a whole when comparing price changes in those areas to shifts in the national median home price. For example, median values in almost 60 percent of Opportunity Zones went up from the first quarter of 2023 to the same period this year by more than 3.1 percent annual gain nationwide. (A similar pattern emerged quarterly when comparing shifts in Opportunity Zones to changes in the national median value, the report said.)

However, in a potential sign of trouble in areas with the very lowest home values, median prices were up annually in only about 45 percent of Opportunity Zones where homes commonly sold for less than $100,000 during the first quarter of 2024, ATTOM found. Prices climbed, year over year, in about 60 percent to 70 percent of zones with higher home values.