ATTOM has released its Q4 2022 report analyzing qualified low-income Opportunity Zones targeted by Congress for economic redevelopment in the Tax Cuts and Jobs Act of 2017. In the report, ATTOM looked at 4,119 zones around the United States with sufficient data to analyze, meaning they had at least five home sales in the Q4 of 2022.
The report found that median single-family home and condo prices decreased from Q3 of 2022 to Q4 of 2022 in 56% of Opportunity Zones around the country and went down at least 5% in almost half. Those declines closely paralleled drops in neighborhoods outside the zones as prices fell across the broader U.S. housing market during the second half of 2022 following a decade of almost continuous growth.
However, some signs emerged during Q4 revealing that Opportunity Zone markets were withstanding the national market retreat better than other neighborhoods, just as they outperformed nationwide increases by some measures during the boom period. In yet another ongoing sign of strength, median values were still up year over year in almost the same portion of Opportunity Zones as elsewhere around the country.
“Home values inside Opportunity Zones are falling. But, on balance, they aren’t dropping any faster than in more well-off neighborhoods around the country,” said Rob Barber, CEO for ATTOM. “By a couple of metrics, they are even doing a little better. That speaks to the continued strength of Opportunity Zone housing markets and their potential allure for investors who still want to take advantage of the program’s tax breaks even in the current uncertain economic environment.”
Typical home values in Opportunity Zones remained well below those in most other neighborhoods around the nation in Q4 of 2022. Median Q4 prices fell beneath the nationwide median of $321,500 in 79%t of Opportunity Zones. That was about the same portion as in earlier periods over the past year. In addition, median prices were less than $200,000 in 53% of the zones during Q4 of 2022, also about the same as in earlier periods.
“This information is illuminating but not surprising. The home values in Opportunity Zones aren’t dropping any faster than in more well-off neighborhoods around the country. Our outlook remains the same, there is plenty of value out there. The smart and savvy investors of today will be rewarded at some point.”
Tom Galvin, partner and director of Opportunity Zone Group at Rose Law Group