Median Home Values Rise During First Quarter of 2024 in Only Half of Opportunity Zones Targeted for Economic Redevelopment Around U.S.; But Price Trends Inside Zones Again Reflect National Market Patterns; By Some Measures, Opportunity Zone Changes Surpass Nationwide Gains
IRVINE, Calif., May 23, 2024 /PRNewswire/ — ATTOM, a leading curator of land, property, and real estate data, today released its first-quarter 2024 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 3,512 zones around the United States with sufficient data to analyze, meaning they had at least five home sales in the first quarter of 2024.
The report found that median single-family home and condo prices increased from the fourth quarter of 2023 to the first quarter of 2024 in just 49 percent of Opportunity Zones around the country. But they were still up annually in almost two-thirds of Opportunity Zones with enough data to measure.
Those trends, in and around low-income neighborhoods where the federal government offers tax breaks to spur economic revival, continued a long-term pattern of home values inside Opportunity Zones moving alongside broader nationwide shifts for at least the last three years.
The mixed first-quarter price patterns hit harder in the very lowest-priced areas, with declining values posing a warning sign in those markets. Nevertheless, the overall picture inside Opportunity Zones revealed ongoing measures of economic strength, or limited weakness, inside some of the country’s most distressed communities compared to other markets around the country. That scenario has remained in place even as a decade-long housing market boom has slowed in Opportunity Zones and elsewhere, with relatively modest price increases over the past year.
By one key measure, Opportunity Zones price trends even showed continued signs again of doing somewhat better than the nation as a whole during the early months of 2024. For example, changes in typical home values across more than half of Opportunity Zones were better than nationwide price movements both quarterly and annually.
“Another quarter, same result. That’s the takeaway yet again inside Opportunity Zones around the U.S., where home prices still lag far behind national numbers, but gains and losses mostly keep tracking overall market patterns,” said Rob Barber, CEO for ATTOM. “Clearly, there are exceptions, especially at the lowest end of the price scale. Nevertheless, the latest data shows Opportunity Zone housing markets continuing to attract considerable interest among home buyers pushed out of higher-priced areas in a market with very limited supplies of homes for sale. That again points to the kind of economic viability needed to lure investors who may want to take advantage of the redevelopment incentives aimed at revitalizing those communities.”
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.
Amid economic limitations, most Opportunity Zones again had typical home values that fell well below those in other markets around the nation in the first quarter of 2024. Median first-quarter prices inside 78 percent of the zones were less the U.S. median of $330,000. That was about the same portion as in earlier periods over the past three years. In addition, median prices remained under $200,000 in about half the zones.
High-level findings from the report:
- Median prices of single-family homes and condominiums increased from the fourth quarter of 2023 to the first quarter of 2024 in 1,503 (49 percent) of the Opportunity Zones around the U.S. with sufficient data to analyze, while staying the same or decreasing in 51 percent. Measured annually, medians remained up from the first quarter of 2023 to same period this year in 1,892 (62 percent) of those zones. (Among the 3,512 Opportunity Zones included in the report, 3,041 had enough data to generate usable median-price comparisons from the fourth quarter of 2023 to the first quarter of 2024; 3,043 had enough data to make comparisons between the first quarter of 2023 and the first quarter of 2024).
- Opportunity Zones did even better than the nation as a whole when comparing price changes in those areas to shifts in the national median home price. For example, median values in almost 60 percent of Opportunity Zones went up from the first quarter of 2023 to the same period this year by more than 3.1 percent annual gain nationwide. (A similar pattern emerged quarterly when comparing shifts in Opportunity Zones to changes in the national median value.)
- However, in a potential sign of trouble in areas with the very lowest home values, median prices were up annually in only about 45 percent of Opportunity Zones where homes commonly sold for less than $100,000 during the first quarter of 2024. Prices climbed, year over year, in about 60 percent to 70 percent of zones with higher home values.
- Among states that had at least 25 Opportunity Zones with enough data to analyze during the first quarter of 2024, the largest portions of zones where median prices increased quarterly were in Kentucky (medians up from the fourth quarter of 2023 to the first quarter of 2024 in 65 percent of zones), New Jersey (58 percent), Tennessee (56 percent), Arizona (56 percent) and Minnesota (56 percent). States where prices were up quarterly in the smallest portion of zones included Utah (median prices up quarterly in 38 percent of zones), New York (42 percent), Virginia (42 percent), South Carolina (42 percent) and Alabama (44 percent).
- States where median home values in Opportunity Zones remained up most often year over year included New Jersey (median prices up annually in 91 percent of zones), Wisconsin (75 percent), Kentucky (70 percent), Minnesota (70 percent) and Illinois (70 percent).
- Of the 3,512 zones in the report, 1,197 (34 percent) had median prices below $150,000 in the first quarter of 2024. That was down from 38 percent of zones with sufficient data a year earlier. Another 558 zones (16 percent) had medians in the first quarter of this year ranging from $150,000 to $199,999.
- Median values in the first quarter of 2024 ranged from $200,000 to $299,999 in 797 Opportunity Zones (23 percent) while they topped the nationwide first-quarter median of $330,000 in just 776 (22 percent).
- The Midwest continued in the first quarter of 2024 to have larger portions of the lowest-priced Opportunity Zone tracts. Median home prices were less than $175,000 in 67 percent of zones in the Midwest, followed by the Northeast (47 percent), the South (42 percent) and the West (6 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 first quarter of 2024. Median household income data for tracts and counties comes from surveys taken the U.S. Census Bureau (www.census.gov) from 2018 through 2022. 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 30TB ATTOM Data Warehouse fuels innovation in many industries including mortgage, real estate, insurance, marketing, government and more through flexible data delivery solutions that include ATTOM Cloud, bulk file licenses, property data APIs, real estate market trends, property navigator and more. Also, introducing our newest innovative solution, making property data more readily accessible and optimized for AI applications– AI-Ready Solutions.
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