Home Prices in Opportunity Zones Fall During Q4By RISMedia Staff
Median single-family home and condo prices decreased from the Q3 to Q4 2022 in 56% of Opportunity Zones around the country, and went down at least 5% in almost half, according to a new report from ATTOM.
ATTOM’s latest report analyzed qualified low-income Opportunity Zones for Q4 2022, targeted by Congress for economic redevelopment in the Tax Cuts and Jobs Act of 2017. The report looked at 4,119 zones around the United States with sufficient data to analyze, meaning they had at least five home sales. The report found that Those declines closely paralleled drops in neighborhoods outside the zones as prices fell across the broader U.S. housing market during the second half of 2022 following a decade of almost continuous growth. However, the report also found some signs emerging that revealed that Opportunity Zone markets were withstanding the national market retreat better than other neighborhoods, just as they outperformed nationwide increases by some measures during the boom period. For example, larger portions of Opportunity Zones saw typical values rise by at least 10% both quarterly and annually compared to the rest of the nation. In yet another ongoing sign of strength, median values were still up year over year in almost the same portion of Opportunity Zones as elsewhere around the country. Key highlights:
“Home values inside Opportunity Zones are falling. But, on balance, they aren’t dropping any faster than in more well-off neighborhoods around the country,” said Rob Barber, CEO for ATTOM. “By a couple of metrics, they are even doing a little better. That speaks to the continued strength of Opportunity Zone housing markets and their potential allure for investors who still want to take advantage of the program’s tax breaks even in the current uncertain economic environment.” “The fourth-quarter price trends, while down, continued a pattern of Opportunity Zones largely keeping pace with the national market despite their location in some of the country’s most distressed communities. Over the past few years, price trends inside the zones matched or even bested nationwide patterns. That happened as a combination of rock-bottom home-mortgage interest rates and a historically small supply of homes for sale pushed up demand and prices throughout the U.S. As buyers with more-limited resources were priced out of many areas, they likely turned to lower-priced locations, including Opportunity Zones,” said the author of the report. “Home prices have dipped in most of the country since the middle of 2022 as higher mortgage rates and consumer price inflation, combined with a faltering stock market and other forces, have cut into what buyers can afford. But the ongoing tight supply for homes for sale could help Opportunity Zones withstand steeper drop-offs.” Barber added, “These areas targeted for redevelopment tax breaks may be less vulnerable to taking a big hit if the market keeps dropping because they are still some of the most affordable markets. The Spring buying season should say a lot about whether they can maintain their strength.” For the full report, click here. |
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