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:
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.
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