Opportunity Zone Home Price Gains Below Nearby Metro Areas

By Kerry Smith

ATTOM’s 3Q Opportunity Zone report found that home prices rose in 74% of the zones and by double digits in about half of them. But surrounding metros did a bit better.

IRVINE, Calif. – Nov. 12, 2020 – ATTOM Data Solutions third-quarter 2020 special report analyzed Opportunity Zones established by Congress in the Tax Cuts and Jobs Act of 2017. In the latest report, ATTOM looked at 1,737 zones with sufficient sales data to analyze and found that median home prices increased year-to-year in the third quarter of 2020 in 74% of the zones – and by more than 10% in slightly more than half the zones.

But the Opportunity Zone price gains fell below the pace of improvements in broader metropolitan statistical areas throughout the country. In non-Opportunity Zone metro areas, prices rose year-to-year in every area, with 75% of them seeing prices jump more than 10%.

In 3Q, three out of four homes in Opportunity Zones (76%) had median home prices that were lower than the national median of $283,813 – roughly the same percentage that were below the national figure in the second quarter of 2020. About 36% of the zones still had median prices of less than $150,000, also about the same as in the prior quarter.

“Home prices in Opportunity Zones around the country continued rising in the third quarter of 2020, riding the wave of a nationwide boom that has defied the economic damage from the widespread coronavirus pandemic,” says Todd Teta, chief product officer with ATTOM Data Solutions.

“The increases point toward signs that some of the country’s most distressed communities have great potential for revival. At that same time, though, prices remain depressed in Opportunity Zones, and a notable number actually dropped in the third quarter – a potentially very troubling indicator,” Teta adds. “Those dueling trends will be important to watch over the coming months amid a highly uncertain economic outlook.”

© 2020 Florida Realtors®

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