Median Values Again Rise At Least 10 Percent in Almost Two-Thirds of Zones; Price Surges Still Keeping Pace With Gains Outside of Zones
IRVINE, Calif. – May 20, 2021 — ATTOM Data Solutions, curator of the nation’s premier property database, today released its first-quarter 2021 special report analyzing qualified low-income Opportunity Zones established by Congress in the Tax Cuts and Jobs Act of 2017 (see full methodology below). In this report, ATTOM looked at 4,579 zones around the United States with sufficient sales data to analyze, meaning they had at least five home sales in the first quarter of 2021.
The report found that median home prices increased from the first quarter of 2020 to the first quarter of 2021 in 75 percent of Opportunity Zones with sufficient data to analyze and rose by at least 10 percent in close to two-thirds of them. Those percentages roughly tracked trends in areas of the U.S. outside of Opportunity Zones, continuing patterns from the fourth quarter of last year.
Prices in Opportunity Zones continued to lag far behind the national average in the first quarter of 2021. About 43 percent of zones with enough data still had median prices of less than $150,000. But that was down from 50 percent a year earlier as prices inside some of the nation’s poorest communities kept surging ahead with the broader market, even as the 2020 Coronavirus pandemic caused major disruptions in the broader U.S. economy.
The pandemic’s impact continued, in the early months of 2021, to hit hardest in lower-income communities that comprise most of the zones targeted for tax breaks designed to spur economic redevelopment. But housing markets inside Opportunity Zones showed no major signs of cooling off as prices there again rode along with a nationwide boom now in its 10th year.
Opportunity Zones are defined in the Tax Act legislation as census tracts in or along side 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 with 1,200 to 8,000 residents, with an average of about 4,000 people.
“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.”
High-level findings from the report include:
- Median prices of single-family houses and condominiums rose from the first quarter of 2020 to the first quarter of 2021 in 2,771 (75 percent) of Opportunity Zones with sufficient data to analyze and increased in 1,987 (54 percent) of the zones from the fourth quarter of last year to the first quarter of this year. By comparison, median prices rose annually in 78 percent of census tracts outside of Opportunity Zones and quarterly in 55 percent of them. (Of the 4,579 Opportunity Zones included in the report, 3,687 had enough data to generate usable median prices in the first quarters of both 2020 and 2021; 3,692 had enough data to make comparisons between the fourth quarter of 2020 and the first quarter of 2021).
- Measured year over year, median home prices rose at least 10 percent in the first quarter of 2021 in 2,249 (61 percent) of Opportunity Zones with sufficient data to analyze. Prices also rose that much during that time period in 58 percent of other census tracts throughout the country with sufficient data.
- Opportunity Zones did even better when comparing areas where prices rose at least 25 percent from the first quarter of 2020 to the first quarter of 2021. Measured year over year, median home prices rose by that level in 1,379 (37 percent) of Opportunity Zones but in only 28 percent of census tracts elsewhere in the country.
- States with the largest percentage of Opportunity Zones where median prices rose, year over year, during the first quarter of 2021 included Arizona (median prices up, year over year, in 84 percent of zones), Idaho (83 percent), Oregon (83 percent), Nevada (82 percent) and Michigan (82 percent).
- Of all 4,579 zones in the report, 1,964 (43 percent) had a median price in the first quarter of 2021 that was less than $150,000 and 786 (17 percent) had medians ranging from $150,000 to $199,999. The total percentage of zones with typical values below $200,000 was down from 67 percent in the first quarter of 2020 to 60 percent in the first quarter of 2021.
- Median values in the first quarter of 2021 ranged from $200,000 to $299,999 in 956 Opportunity Zones (21 percent) while they were at least $300,000 or more in 873 (19 percent).
- The Midwest continued in the first quarter of 2021 to have the highest portion of Opportunity Zone tracts with a median home price of less than $150,000 (68 percent), followed by the South (51 percent), the Northeast (43 percent) and the West (8 percent).
- Median household incomes in 87 percent of Opportunity Zones were less than the medians in the counties where they were located. Median incomes were less than three-quarters of county-level figures in 54 percent of zones and were less than half in 14 percent.
The ATTOM Data Solutions 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 Data Solutions 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 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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