Median home prices grew year over year during the first quarter in 75% of opportunity zones, according to a new special report from Attom Data Solutions.
Home prices within the zones — specially designated low-income areas where new investments may be eligible for tax benefits — continue to lag far behind the national average. During the first quarter, about 43% of the 4,579 opportunity zones with enough data to evaluate still had median prices less than $150,000, Attom reported.
But those median values are rising. That 43% figure is down from 50% one year earlier, and the share of opportunity zones where home prices are climbing annually is keeping pace with the share of areas outside opportunity zones reporting price growth over the same period. Seventy-five percent of opportunity zones saw median home price growth from the first quarter of 2020 to the first quarter of 2021, roughly on par with 78% of non-opportunity zone areas.
And in close to two-thirds of opportunity zones, prices are rising fast. Annual price growth of at least 10% was reported in 61% of opportunity zones with sufficient data —a higher share than the 58% of other Census tracts across the U.S. with price gains over that same threshold.
“Some of the country’s poorest neighborhoods continued riding the long national boom in home prices during the first quarter of the year, reaping increases that pretty much matched those in more-affluent areas. Those ongoing gains emerged in the latest price data showing values in designated Opportunity Zones rising at about the same pace, or even more, than in other communities,” said Todd Teta, chief product officer with Attom Data Solutions.
“Home values inside the zones remain quite low compared to the rest of the U.S. But they are far from immune from the boom. That shows continued interest among home buyers in marginal areas and continues to bode well for the redevelopment that Opportunity Zone tax breaks are designed to promote.”
Opportunity zones — one of the hallmark housing and real estate policies of the Trump administration — did even better when analyzing areas where prices rose at least 25% year over year. From Q1 2020 to Q1 2021, median home prices rose by that level in 37% of opportunity zones, compared to just 28% of census tracts elsewhere in the United States.
The total percentage of opportunity zones with typical home values below $200,000, while still high, has also decreased. In the first quarter, 67% of opportunity zones evaluated in Attom’s report saw values below that threshold. That share declined to 60% in the first quarter of 2021.
