Homes in Opportunity Zones across the country experienced price gains in the second quarter of 2022 that largely kept pace with growth in the broader housing market, according to newly released data from ATTOM, a data curator which analyzed 5,198 different zones. Opportunity Zones are defined as census tracts in or alongside low-income neighborhoods that meet various criteria for redevelopment in all 50 states.
Median single-family home and condo prices rose in 63% of Opportunity Zones around the nation in the second quarter, just shy of the 69% price growth experienced in census tracts outside Opportunity Zones. Typical values also increased by at least 20% year-over-year in about half of the zones with enough data to analyze. Additionally, median values increased in about half the Opportunity Zones by more than the 8.8% in the second quarter and by 15.3% year-over-year.
These price spikes inside Opportunity Zones indicate high buyer demand combined with decreased housing supply, which is at a historic low, could have priced many households out of more upscale neighborhoods into lower-priced markets.
Key findings:
- Median home prices rose by at least 25% in 39% of Opportunity Zones
- The West had the largest portion of zones where median prices rose year over year. Utah, Arizona and Nevada experienced gains in over 90% of Opportunity Zones.
- Median values ranged from $200,000 to $299,999 in 22% of zones while they topped the nationwide second-quarter median of $346,000 in 23%.
- The Midwest retained the distinction of having the highest portion of least-expensive Opportunity Zone tracts, followed by the Northeast, the South and the West, respectively.
- Median household incomes in 87% of the Opportunity Zones analyzed were less than the medians in the counties where they were located.
The takeaway:
“Homes in most Opportunity Zones represent affordable options for real estate investors and consumer homebuyers in a market where both home prices and mortgage rates have been rising,” said Rick Sharga, executive vice president of market intelligence at ATTOM. “With home prices up 15 percent compared to a year ago and mortgage rates nearly doubled, both investors and homebuyers may find the lower purchase prices for homes available in Opportunity Zones very attractive.”
“Demand continued into the Spring buying season even as home mortgage rates rose in the second quarter to nearly 6 percent, gasoline and other fuel costs soared, inflation shot up to 40-year highs and economic uncertainty across the country increased.”
Brendan Rascius is RISMedia’s associate editor. Email him your story ideas to brascius@rismedia.com.
