Your inside source for real estate, development and construction information serving the counties of Mecklenburg, Union & Iredell VOLUME 107 NUMBER 48 ■ MECKTIMES.COM
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TUESDAY, NOVEMBER 28, 2023
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Opportunity Zone housing markets continue to keep up with broader price gains across nation in third quarter ATTOM has released its third-quarter 2023 report analyzing qualified lowincome 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 3,465 zones around the United States with sufficient data to analyze, meaning they had at least five home sales in the third quarter of 2023. The report found that median singlefamily home and condo prices rose from the second quarter of 2023 to the third quarter of 2023 in 54 percent of Opportunity Zones around the country and rose at least 5 percent in close to half. The price improvements in and around low-income neighborhoods where the federal government offers tax breaks to spur economic revival, again tracked closely with a nationwide rebound from a temporary dip in home values that hit last year. The renewed price growth also continued a long-term trend of home values inside Opportunity Zones following along with broader market gains for at least the last three years – an ongoing sign of economic strength inside some of the country’s most distressed communities. Opportunity Zone markets even showed signs again, by one key measure, of doing slightly better than other neighborhoods around the country during the third quarter of this year. A slightly larger
portion of Opportunity Zones versus other locations saw median values rise annually at a faster pace than they did nationwide. “The third-quarter price data shows that many of the country’s lower-income neighborhoods continue to come back from the brief downturn we saw last year, right along with the rest of the U.S. housing market. While there were exceptions, Opportunity Zones overall saw no extended backslide and continued to benefit from the boom that has spiked home values around the nation for more than a decade,” said Rob Barber, CEO for ATTOM. “That trend is likely connected to financially marginal house hunters getting priced out of more expensive locations and turning to places like Opportunity Zones for affordable homes. This should give investors looking to take advantage of Opportunity Zone tax breaks more welcome news about the potential for those neighborhoods.” 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. As they have historically, typical home values in most Opportunity Zones fell well below those in other neighborhoods
around the nation in the third quarter of 2023. Median third-quarter prices were less than the U.S. median of $350,000 in 81 percent of Opportunity Zones. That was about the same portion as in earlier periods over the past year. In addition, median prices fell below $200,000 in 49 percent of the zones during the third quarter of 2023. Considerable price volatility also continued in Opportunity Zones, with median values either dropping or increasing by at least 5 percent in more than three-quarters of those locations from the second quarter of 2023 to the third quarter of 2023. That again likely reflected the small number of sales in many zones. Still, the latest trends marked the second straight quarter in which Opportunity Zone home values, in general, erased losses seen during the downturn that lasted from the middle of 2022 into early 2023. That highlighted an extended scenario of home-price runups across the U.S. leaving a significant cluster of potential buyers with limited resources and few choices other than the lowestpriced communities. The apparently healthy demand in the third quarter continued even as home-mortgage rates climbed back up toward 8 percent for 30year fixed-rate loans over the Summer,
PLEASE SEE HOUSING MARKETS ON PAGE 3
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“Foreclosure filings continue to paint a concerning picture.” Rob Barber, ATTOM.
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