Median single-family home and condo prices rose from the fourth quarter to the first quarter in 55 percent of Opportunity Zones around the country, according to ATTOM’s report on the economic redevelopment areas targeted by Congress in 2017.
Prices jumped by at least 20 percent annually in half of the zones.
While the pace of increases slowed in the first quarter compared with peak periods last year, median values still went up in about half the Opportunity Zones by more than the 16.6 percent year-over-year gain seen nationwide.
“Home price trends in Opportunity Zones mirror what we’re seeing elsewhere in the housing market,” ATTOM Executive Vice President of Market Intelligence Rick Sharga said in a release. “Strong price growth has helped homeowners in these economically-challenged areas benefit from higher equity and should contribute to the ongoing redevelopment of these areas.”
Typical home values in Opportunity Zones did remain lower than those in most other neighborhoods around the nation in the first quarter, according to ATTOM. Median first-quarter prices were less than the national median of $320,500 in 76 percent of Opportunity Zones.
Typical values also were under $200,000 in 51 percent of the zones during the first quarter. That was the same as in the fourth quarter but was down from 61 percent a year earlier.
“With so little entry level inventory on the market, homes in Opportunity Zones represent some of the few remaining affordable options for prospective homebuyers,” Sharga said. “This is especially important for first-time buyers, who typically have to stretch their finances in order to be able to afford a home.”
Both the overall housing market and Opportunity Zones are facing headwinds today that didn’t exist a few months ago, as mortgage rates have risen to 5 percent, the stock market has fallen, and consumer price inflation is at a 40-year high. But those uncertainties have yet to stifle price growth, according to ATTOM.
States with the largest portion of zones where median prices rose year-over-year were led by Utah (median prices up year-over-year in 97 percent of zones), Arizona (97 percent), Nevada (93 percent), Oregon (88 percent) and Florida (87 percent).
The Midwest continued to have the highest portion of Opportunity Zone tracts with a median home price of less than $150,000 (61 percent), followed by the South (39 percent), the Northeast (39 percent) and the West (3 percent).