The growth of median home single family and condominium prices in Opportunity Zones trailed that of the rest of the nation year over year in the third quarter, reported ATTOM Data Solutions.
The Opportunity Zone dwellings increased an average of 20% in 47% of the homes in the survey compared to the same hike in 53% of other census tracts in the nation.
About three-quarters of zones with enough data to analyze had typical third-quarter prices below the national median of $310,500. That was about the same as in earlier periods over the past year, according to ATTOM figures.
Opportunity Zones are census tracts in or alongside low-income neighborhoods that meet various criteria for redevelopment in the United States.
“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,” said Todd Teta, chief product officer with ATTOM.
Despite being lower than in wealthier neighborhoods, the report said the increases in Opportunity Zones could be seen as encouraging despite the pandemic’s financial impact causing the worst damage in lower-income communities like those comprising most of the zones targeted for tax breaks designed to spur economic redevelopment.
Median home values in 23% of Opportunity Zones topped the national median of all homes at $310,500 in the third quarter.
In the second quarter, ATTOM asserted homes in the less affluent areas continued to roughly track trends in other areas of the US, even surpassing them in some ways, much as they did in the first quarter of this year
“Housing markets kept chugging along in some of the nation’s poorest neighborhoods during the second quarter of this year in another sign that the decade-long home price boom across the nation knows pretty much no boundaries. Values kept rising inside specially designated opportunity zones at around the same rate as they did in other areas even as the Coronavirus pandemic continued causing economic hardship,” said Teta. “For sure, property values in opportunity zones remain depressed. But the price spikes there not only suggest that those communities are a very viable option for households priced out of more-upscale neighborhoods. They also indicate the ongoing potential for the economic revival that underpins the opportunity zone tax breaks.”
Home prices in Opportunity Zones have been on a steady trajectory. Year to year from the first quarter of 2020 to the first quarter of 2021, ATTOM said median single family home prices increased in 75% of Opportunity Zones.
In addition, median home prices increased in 54% of the zones from the fourth quarter in 2020 to the first quarter in 2021. By comparison, median prices rose annually in 78 percent of census tracts outside of Opportunity Zones and quarterly in 55 percent of them.
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