Based on a new report by ATTOM, median single-family home and condo prices in the U.S. stayed the same or decreased from the fourth quarter of 2022 to the first quarter of 2023 in 52 percent of Opportunity Zones around the country where there was sufficient data and fell at least 3 percent in almost half. At the same time, though, they increased by at least that much in about 40 percent of those markets.
Those mixed patterns largely matched trends in neighborhoods outside the zones, as a slowdown in the national housing market, which began during the second half of 2022, continued into 2023 after a decade of almost unceasing growth.
By one key measure, Opportunity Zone markets even showed signs of holding up slightly better than other neighborhoods around the country during the first quarter of this year. Median prices in those areas were more often still higher compared to the point when the U.S. market began to flatten out last year.
"Home-price trends inside Opportunity Zones keep following along with the broader national picture, as they have for the past couple of years," said Rob Barber, chief executive officer for ATTOM. "Through boom times and weaker times, values inside the zones have gone up or down at about the same pace as the national market. They're even doing a little better these days, depending on how you look at it. The latest numbers provide a sign that areas targeted for the program's tax breaks are resilient during a time when the broader market is no longer heading ever higher."
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 in the past, typical home values in Opportunity Zones continued to fall well below those in most other neighborhoods around the nation in the first quarter of 2023. Median first-quarter prices were less than the U.S. median of $321,135 in 79 percent of Opportunity Zones. That was about the same portion as in earlier periods over the past year. In addition, median prices remained less than $200,000 in 55 percent of the zones analyzed during the first quarter of 2023.
High-level findings from the report: