HOUSING MARKETS IN OPPORTUNITY ZONE REDEVELOPMENT AREAS CONTINUE TO KEEP UP WITH NATIONAL PRICE INCREASES

IRVINE, Calif., Feb. 17, 2022 /PRNewswire/ --  ATTOM, a leading curator of real estate data nationwide for land and property data, today released its fourth-quarter 2021 special report analyzing qualified low-income Opportunity Zones targeted by Congress for economic redevelopment in the Tax Cuts and Jobs Act of 2017 (see full methodology below). In this report, ATTOM looked at 5,180 zones nationwide with sufficient data to analyze, meaning they had at least five home sales in the fourth quarter of 2021.

The report found that median single-family home and condo prices rose from the third quarter of 2021 to the fourth quarter of 2021 in 56 percent of Opportunity Zones around the country and spiked by at least 20 percent annually in almost half.

While the pace of increases slowed a bit in the fourth quarter, median values still went up in about half the zones by more than the 16.1 percent gain seen nationwide from the fourth quarter of 2020 to the fourth quarter of 2021.

Typical homes in Opportunity Zones did continue to cost just a fraction of those in most other neighborhoods around the nation in the fourth quarter of 2021. Median fourth-quarter prices sat below the national median of $315,648 in 76 percent of Opportunity Zones, about the same as in earlier periods last year.

Typical values also remained under $200,000 in 51 percent of the zones during the fourth quarter of 2021. But that improved from 53 percent in the third quarter of 2021 and 61 percent a year earlier, as markets inside some of the nation's poorest communities improved despite the ongoing threat from the Coronavirus pandemic that hit those areas hardest when it struck in 2020.

In one sign of even stronger growth, price spikes of at least 25 percent from the fourth quarter of 2020 to the same period in 2021 showed up in a larger portion of Opportunity Zones than in other neighborhoods around the country.

Opportunity Zones are defined in the Tax Act legislation as census tracts in or alongside low-income neighborhoods that meet various criteria for redevelopment in all 50 states, the District of Columbia and U.S. territories. Census tracts, as defined by the U.S. Census Bureau, cover areas that have 1,200 to 8,000 residents, with an average of about 4,000 people.

Prices inside Opportunity Zones kept growing during the fourth quarter of 2021 as a decade-long price boom in the United States continued to spread through every part of the country, including lower-income communities.

The trend persisted both because of and in spite of the pandemic as a surge of buyers continued chasing a tight supply of homes for sale. The buying glut has propelled the market amid a combination of historically low mortgage rates and a desire of many households to trade life in congested areas, often in apartment buildings, for the relative safety and larger space for work-at-home lifestyles offered by houses or condominiums.

"Neighborhoods in and around some of the poorest areas of the United States kept riding the national housing market boom in the fourth quarter of last year, much as they did throughout 2021. The pace of price increases slowed, which is common in the last few months of any year. But gains in Opportunity Zones again pretty much matched what was going on elsewhere and even beat out the rest of the market in some ways," said Todd Teta, chief product officer with ATTOM. "While Opportunity Zone markets remained depressed, the increases probably reflected the trickle-down effect of buyers priced out of more expensive neighborhoods. The gains also represented an ongoing sign of vitality in lower-income areas – something that ups the ante for investors looking to take advantage of Opportunity Zone tax breaks."

High-level findings from the report include:

• Median prices of single-family houses and condominiums rose from the third quarter of 2021 to the fourth quarter of 2021 in 2,688 (56 percent) of Opportunity Zones with sufficient data to analyze, and increased from the fourth quarter of 2020 to same period last year in 3,360 (77 percent) of those zones. By comparison, median prices rose quarterly in 55 percent of census tracts outside of Opportunity Zones and annually in 81 percent. (Of the 5,180 Opportunity Zones included in the report, 4,843 had enough data to generate usable median-price comparisons from the third to the fourth quarter of 2021; 4,379 had enough data to make comparisons between the fourth quarter of 2020 and the fourth quarter of 2021).
• Measured year over year, median home prices rose at least 20 percent in the fourth quarter of 2021 in 1,997 (46 percent) of Opportunity Zones with sufficient data. Prices rose that much during that time period in 41 percent of other census tracts throughout the country.
• Opportunity Zones again did even better when comparing areas where prices rose at least 25 percent from the fourth quarter of 2020 to the fourth quarter of 2021. Measured year over year, median home prices rose that much in 1,655 (38 percent) of Opportunity Zones but in only 31 percent of census tracts elsewhere in the country.
• Typical single-family home values in 51 percent of all Opportunity Zones increased annually in the fourth quarter of 2021 by more than the jump in the overall national median home price. Nationally, the figure rose 16.1 percent, year over year. Measured quarterly, prices in Opportunity Zones increased at a slower rate than earlier in 2021. But 52 percent of zones still saw larger quarterly improvements than the national uptick of 1.4 percent.
• Among states that had at least 25 Opportunity Zones with enough data to analyze during the fourth quarter of 2021, those with the largest portion of zones where median price rose year over year were in the West. They were led by Idaho (median prices up, year over year, in 96 percent of zones), Nevada (95 percent), Utah (92 percent), Oregon (91 percent) and Washington (91 percent).
• Of all 5,180 zones in the report, 1,803 (35 percent) still had median prices in the fourth quarter of 2021 that were less than $150,000 and 856 (17 percent) had medians ranging from $150,000 to $199,999.
• Median values in the fourth quarter of 2021 ranged from $200,000 to $299,999 in 1,176 Opportunity Zones (23 percent) while they topped the national median of $315,648 in 1,219 (24 percent).
• The Midwest continued in the fourth quarter of 2021 to have the highest portion of Opportunity Zone tracts with a median home price of less than $150,000 (61 percent), followed by the South (40 percent), the Northeast (36 percent) and the West (4 percent).
• Median household incomes in 87 percent of the 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 percent of zones and less than half in 16 percent.

Report methodology
The ATTOM Opportunity Zones analysis is based on home sales price data derived from recorded sales deeds. Statistics for previous quarters are revised when each new report is issued as more deed data becomes available. ATTOM's analysis compared median home prices in census tracts designated as Opportunity Zones by the Internal Revenue Service. Except where noted, tracts were used for the analysis if they had at least five sales in the fourth quarter of 2021. Median household income data for tracts and counties comes from surveys taken the U.S. Census Bureau (www.census.gov) from 2015 through 2019. The list of designated Qualified Opportunity Zones is located at U.S. Department of the Treasury. Regions are based on designations by the Census Bureau. Hawaii and Alaska, which the bureau designates as part of the Pacific region, were included in the West region for this report.

About ATTOM
ATTOM provides premium property data to power products that improve transparency, innovation, efficiency and disruption in a data-driven economy. ATTOM multi-sources property tax, deed, mortgage, foreclosure, environmental risk, natural hazard, and neighborhood data for more than 155 million U.S. residential and commercial properties covering 99 percent of the nation's population. A rigorous data management process involving more than 20 steps validates, standardizes, and enhances the real estate data collected by ATTOM, assigning each property record with a persistent, unique ID — the ATTOM ID. The 20TB ATTOM Data Warehouse fuels innovation in many industries including mortgage, real estate, insurance, marketing, government and more through flexible data delivery solutions that include bulk file licenses, property data APIs, real estate market trends, property reports and more. Also, introducing our newest innovative solution, that offers immediate access and streamlines data management – ATTOM Cloud.

Media Contact:
Christine Stricker
949.748.8428
[email protected]

Data and Report Licensing:
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SOURCE ATTOM

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