Median Prices Rise Annually in Fourth Quarter of 2020 in Three-Quarters of Opportunity Zones; Median Values Jump At Least 10 Percent in Almost Two-Thirds of Zones; Prices Go Up at Roughly the Same Pace as Increases Outside of Zones
ATTOM Data Solutions, curator of the nation’s premier property database, today released its fourth-quarter 2020 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 3,588 zones around the United States with sufficient sales data to analyze, meaning they had at least five home sales in the fourth quarter of 2020.
The report found that median home prices increased from the fourth quarter of 2019 to the fourth quarter of 2020 in 77 percent of Opportunity Zones with sufficient data and rose by more than 10 percent in nearly two-thirds of them. Those percentages were roughly the same as in areas of the U.S. outside of Opportunity Zones.
With prices remaining well below average in most Opportunity Zones, about 38 percent of the zones with enough data to analyze still had median prices of less than $150,000 in the fourth quarter of 2020. However, that was down from 46 percent a year earlier as prices inside some of the nation’s poorest communities rolled ahead with broader market, defying troubles flowing from the 2020 Coronavirus pandemic that slowed or idled significant sectors of the U.S. economy.
The pandemic’s impact generally has hit hardest in lower-income communities that comprise most of the zones targeted for tax breaks designed to spur economic redevelopment. Housing markets inside Opportunity Zones continued to benefit from the nation’s nine-year price boom.
Opportunity Zones are defined in the Tax Act legislation as census tracts in or along side low-income neighborhoods that met 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.
“The country’s long run of home-price increases continues to leave no part of the housing market untouched, boosting fortunes from the wealthiest to the poorest parts of the United States. The latest evidence is the fourth-quarter 2020 data showing prices going up in Opportunity Zone neighborhoods at around the same rate, and sometimes more, than in more well-off communities,” said Todd Teta, chief product officer with ATTOM Data Solutions. “No doubt, prices remain substantially lower in Opportunity Zones, but the fact that they often rose by double-digit percentages in Q4 is significant. Not only does it show market strength, but it also suggests that many distressed communities are ripe for the redevelopment that the Opportunity Zone tax breaks are designed to promote.”
High-level findings from the report include:
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 fourth quarter of 2020. Median household income data for tracts and counties comes from surveys taken by 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.
To learn more about the data behind this article and what Attom Data Solutions has to offer, visit https://www.attomdata.com/.
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