ATTOM released its 2021 third quarter report that analyses qualified low-income opportunity zones, established by Congress in the Jobs Act and Tax Cuts in 2017. This report analyses 5,402 opportunity zones across the United States, all of which had at least 5 home sales in the third quarter.
Results showed that median single-family homes and condo pricing increased in 62% of opportunity zones in the third quarter of 2021, and 47% of them rose by at least 20% annually. These trends continue to parallel the broader housing market as it powered through it’s 10th straight year of gains.
Home values in opportunity zones continue to trail well behind values in most neighborhoods across America. Three quarters of these opportunity zones analyzed had typical third quarter prices below the national median of $310,500 — approximately the same as earlier periods over the past year.
Median values remained under $200,000 in 53% of opportunity zones in the third quarter this year, but that’s a slight decline from 57% in the second quarter this year and 63% a year earlier. Despite the coronavirus remaining a threat to the U.S. economy, home values within the nation’s poorest communities kept pace with the broader national housing market gains.
Prices surged 25% year-over-year in the third quarter, showing further signs of growth in 4 out of every 10 opportunity zones compared to 3 in every 10 counties for the rest of the country. These increases came despite the pandemic’s financial impact, causing the worst damage in poorer communities like those targeted for tax breaks to spur economic redevelopment.
“The third quarter of 2021 was just like the second, which was pretty much like the first when it came to home prices in some of the more distressed neighborhoods around the United States,” said Todd Teta, chief product officer with ATTOM. “Values in markets scattered through so-called Opportunity Zones kept rising at around the same pace seen in more upscale areas, as the housing-market boom kept lifting fortunes just about everywhere. Home values in Opportunity Zones are still very low relative to other areas. But the ongoing gains showed that lots of households are buying in those areas – something that should lure the attention of investors looking to take advantage of Opportunity Zone tax breaks.”
Additionally, the report found that typical single-family home values in roughly half of all opportunity zones increased annually in the third quarter of 2021 by more than the 15.9% increase in the overall national median home price.
States with the largest percentage of zones where median prices rose year-over-year during the third quarter of 2021 were Idaho (median prices were up year-over-year in 97% of zones), Arizona (94%), Massachusetts (91%), Delaware (90%) and Utah (89%).
Out of the 5,402 zones analyzed in the report, 36% still had median prices that were less than $150,000 and 17% had medians ranging from $150,000 to $199,999. The percentage of zones with typical home values under $200,000 was down from 63% in the third quarter of 2020 to 53% in the third quarter of 2021.
The Mid-West continues to have the highest portion of opportunity zone tracks with a median home price of $150,000 at 60%, followed by the South at 4%, the Northeast at 35%, and the West at 5%.
Median household income in 87% of opportunity zones were less than the median in the counties they were located. Median incomes were less than three-quarters of county-level figures in 56% of zones and less than half in 16% of zones.
