Median single-family home and condo prices increased in 61% of Opportunity Zones around the country, and rose at least 5% in about half, according to a new report from ATTOM.
ATTOM’s Opportunity Zones report looked at 3,909 zones around the United States with sufficient data to analyze, meaning they had at least five home sales in Q2 2023. The report found that the Q2 increases reversed a brief fallback in values during the prior two quarters in a majority of zones, which sit in and around low-income neighborhoods where the federal government offers tax breaks to spur economic revival.
Key highlights:
- Median prices of single-family homes and condominiums increased in 1,977 (61%) of the Opportunity Zones around the U.S. with sufficient data to analyze, while decreasing or staying the same in 39%. Medians also were up in 2,049 (55%) of those zones.
- Median values went up at least 5% quarterly in 52% of Opportunity Zones with sufficient data to analyze.
- But in a sign that Opportunity Zones did a bit better than the rest of the country, median prices were up year-over-year by at least 3% in a higher portion of those areas. They were up annually by that much in 50% of Opportunity Zones versus 45% of local markets in other parts of the country.
- Among states that had at least 25 Opportunity Zones with enough data to analyze, the largest portions of zones where median prices rose quarterly were in Minnesota (medians up in 76% of zones), Tennessee (75 percent), Alabama (68%), California (67%) and Indiana (67%). States where prices were up quarterly in the smallest portion of zones included Louisiana (median prices up quarterly in 45% of zones), Colorado (53%), Virginia (53%), Oregon (54%) and Texas (58%).
- States where median home values in Opportunity Zones were up most often year over year included Indiana (median prices up annually in 88% of zones), Massachusetts (82%), New Jersey (80%), Tennessee (80%) and Missouri (79%).
- Of the 3,909 zones in the report, 1,282 (33%) had median prices that were less than $150,000. That was down from 36% of those zones a year earlier. Another 614 zones (16%) had medians ranging from $150,000 to $199,999.
- Median values ranged from $200,000 to $299,999 in 923 Opportunity Zones (24%) while they topped the nationwide second-quarter median of $350,000 in just 754 (19%).
- The Midwest continued to have larger portions of the lowest-priced Opportunity Zone tracts. Median home prices were less than $175,000 in 66% of zones in the Midwest, followed by the Northeast (46%), the South (43%) and the West (6%).
- Median household incomes in 87% of Opportunity Zones analyzed were less than the medians in the counties where they were located. Median incomes were less than three-quarters of county-level figures in 55% of zones and less than half in 15%.
Major takeaway:
“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,” said Rob Barber, CEO for ATTOM. “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.”
Barber added, “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. 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.”
For the full report, click here.
