By Anayat Durrani

Median single-family home and condo prices rose from the fourth quarter of 2021 to the first quarter of 2022 in 55 percent of Opportunity Zones nationwide and jumped by at least 20 percent annually in half of the zones, according to a first-quarter 2022 report released by ATTOM, a leading curator of real estate data for land and property data.

The report analyzed qualified low-income Opportunity Zones and looked at 5,092 zones nationwide with sufficient data to analyze, meaning those with at least five home sales in the first quarter of 2022.

Median values increased in about half the Opportunity Zones by more than the 16.6 percent year-over-year gain seen nationwide.

“The good news is that Opportunity Zone home values rising at rates comparable to the rest of the market means that the program is accomplishing part of what it set out to achieve: economic improvement in struggling geographies,” says Rick Sharga, executive vice president of market intelligence at ATTOM.

Opportunity Zones helps homes appreciate in value similar to other areas

Sharga says between $75 and $100 billion has been invested since the start of the program “and the fact that home prices have appreciated as strongly as they have is a sign of economic improvement.”

Home values in Opportunity Zones remained lower than those in most other neighborhoods in the country in the first quarter of 2022. Median first-quarter prices were less than the national median of $320,500 in 76 percent of Opportunity Zones, about the same portion as in earlier periods last year, the report said.

Typical values also were under $200,000 in 51 percent of the zones during the first quarter of 2022. That figure marked the same percentage as in the fourth quarter of 2021, but dropped from 61 percent a year earlier, as markets inside some of the country’s poorest communities kept improving amid a time of historically low mortgage rates, high buyer demand and tight supplies of homes for sale, the report said.

In an additional sign of continued strong growth, prices spiked at least 25 percent from the first quarter of 2021 to the same period in 2022 in a larger portion of Opportunity Zones than in other neighborhoods around the country.

Home prices rise in Opportunity Zones

Prices inside Opportunity Zones remained on an upward track during the first quarter of 2022 as a decade-long price boom in the U.S. kept boosting markets throughout the nation. Those included lower-income communities that have become more appealing as many buyers have gotten priced out of more-expensive neighborhoods, the report said.

Both the overall housing market and Opportunity Zones are facing headwinds today that were not there a few months ago, the report said, as mortgage rates have increased to 5 percent, the stock market has fallen, and consumer price inflation is at a 40-year high, though those uncertainties have yet to stifle price growth.

While Sharga says the overwhelming majority of properties purchased with QOZ funds tend not to be homes but rather commercial units, such as retail, office, industrial, hospitality or multifamily properties, the data looks promising.

He notes if commercial property investments weren't doing well, “it's unlikely that home prices would be appreciating the way they are, and rising home values should ultimately add to the value of the commercial properties, and contribute to the overall economic health of the area.”


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