Nearly 60% of all areas perform better than the national market; Values continue to rise at least 15% per year in almost half of the areas, even as the US market boom wanes
IRVINE, Calif., November 10, 2022 /PRNewswire/ — ATTOM, a leading nationwide real estate data curator for land and real estate data, today released its 2022 Third Quarter Report analyzing targeted qualified low-income opportunity areas. by Congress for Economic Adjustment in the Tax Cuts and Jobs Act of 2017 (see full methodology below). In this report, ATTOM examined 4,732 areas around United States with enough data to analyze, which means they had at least five home sales in the third quarter of 2022.
The report found that median prices for single-family homes and condos increased from the second quarter of 2022 to the third quarter of 2022 in 51% of the country’s opportunity zones and increased by at least 3% in almost half. . These gains fell short of those seen in previous periods over the past year, but still stood out within a broader domestic market that saw a 3% decline in median price. single-family homes in the third quarter, after a decade of almost uninterrupted growth. earnings.
The latest price improvements have extended scenarios similar to those of last year, with house price changes in the nation’s troubled neighborhoods continuing to track, if not outpace, the performance of the national housing market.
“The combination of higher home prices and mortgage rates that have doubled in recent months has made affordability a real challenge for traditional homebuyers and investors alike,” said Rick Sharga, Executive Vice President of Business Intelligence at ATTOM. “For many potential buyers, the solution to deteriorating affordability is to seek out cheaper homes, and it appears that homes in opportunity areas could represent a relative bargain for buyers who have been shut out from others. markets.”
Typical home values in Opportunity Zones remained lower than most other neighborhoods nationwide in the third quarter of 2022. Median prices in the third quarter fell below the national median of $339,815 in 79% of opportunity areas. This was about the same proportion as in previous periods last year. In addition, median prices remained lower $200,000 in 50% of areas during the third quarter of 2022. But this percentage was down from 56% in the third quarter of 2021.
Amid these trends, considerable price volatility continued in opportunity zones, with median values falling or rising quarterly by at least 5% in around two-thirds of them, likely reflecting the small number of sales in many regions.
Opportunity zones are defined in tax law legislation as census tracts in or adjacent to low-income neighborhoods that meet various redevelopment criteria in all 50 states, District of Colombia and US territories. Census tracts, as defined by the US Census Bureau, cover areas that have between 1,200 and 8,000 people, with an average of about 4,000 people.
The relative strength of opportunity zone markets continued into the third quarter, even amid a series of forces that threatened to stall or derail an 11-year boom that nearly tripled home prices at nationwide and has trickled down to the cheapest neighborhoods in the country. During the summer of 2022, the national median sale price fell 3%, 30-year mortgage rates approaching 7%, consumer price inflation remained at its highest level in 40 years and the stock market fell. These headwinds all reduced what homebuyers could afford.
Further declines in home values could have a particularly harsh effect on opportunity zones if those declines make other areas more affordable for buyers.
High level conclusions of the report:
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Median prices for single-family homes and condominiums increased from the second quarter of 2022 to the third quarter of 2022 in 2,283 (51%) of the opportunity zones in the United States with enough data to analyze, while decreasing or remaining the same in 49%. They increased from the third quarter of 2021 to the same period this year in 3,162 (71%) of these areas.
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But among these opportunity zones, trends were weaker than in previous quarters of last year. Still, they roughly matched or slightly exceeded broader national trends. By comparison, median prices increased from the second to third quarters of 2022 in 48% of census tracts outside of opportunity zones and annually in 75%. (Of the 4,732 Opportunity Zones included in the report, 4,441 had enough data to generate usable median price comparisons from Q2 to Q3 2022; 4,432 had enough data to draw comparisons between the third quarter of 2021 and third quarter of 2022).
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Measured year over year, median home prices remained up at least 15% in the third quarter of 2022 in 1,981 (45%) of the opportunity zones with sufficient data. Prices rose as much during this period in only 40% of other census tracts across the country.
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Typical single-family home values in 58% of Opportunity Zones rose or fell less than the national median home price decline from the second quarter of 2022 to the third quarter of 2022. Nationally, the median fell by 2.7% per quarter. Additionally, 55% of the median values within the Opportunity Zones increased from Q3 2021 to Q3 2022 more than the national annual increase of 9.7%.
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Of the 4,732 areas in the report, 1,581 (33%) still had Q3 2022 median prices below $150,000. That was down from 38% of those areas a year earlier. Another 768 areas (16%) had medians in the third quarter of this year ranging from $150,000 at $199,999.
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Median values in the third quarter of 2022 ranged from $200,000 at $299,999 in 1,057 Opportunity Zones (22%), as they topped the national median for the third quarter of $339,815 out of 1,013 (21%).
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The Midwest continued in Q3 2022 to have the bulk of the cheapest opportunity zones. Median home prices were below $175,000 in 66% of areas in the Midwest, followed by the South (45%), Northeast (44%) and West (6%).
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Median household incomes in 87% of Opportunity Zones analyzed were lower than the medians of the counties where they were located. Median incomes were less than three-quarters of county-level figures in 56% of areas and less than half in 16%.
Report methodology
The ATTOM Opportunity zone analysis is based on home sale price data derived from registered deeds of sale. Statistics for previous quarters are revised with each new report as more data on acts become available. ATTOM The analysis compared median home prices in census tracts designated as opportunity areas by the Internal Revenue Service. Unless otherwise specified, sectors were used for the analysis if they had at least five sales during the first quarter of 2022. Median household income data for sectors and counties are from surveys conducted by the US Census Bureau (www.census.gov) from 2016 to 2020. The list of designated qualified opportunity areas can be found at US Department of Treasury. Regions are based on Census Bureau designations. Hawaii and Alaskawhich the office designates as part of the Pacific region, have been included in the West region for this report.
About ATTOM
ATTOM provides superior real estate data to power products that improve transparency, innovation, efficiency and disruption in a data-driven economy. Multi-source ATTOM property tax, deed, mortgage, foreclosure, environmental hazard, natural hazard, and neighborhood data for over 155 million residential and commercial properties in the United States covering 99% of the population from the country. A rigorous data management process comprising more than 20 steps validates, standardizes and improves the real estate data collected by ATTOM, by assigning each property record a unique and persistent identifier – the ATTOM identifier. The 30TB ATTOM Data Warehouse powers innovation across multiple industries, including mortgage, real estate, insurance, marketing, government, and more, with flexible data delivery solutions that include bulk file licensing, real estate data APIs, real estate market trends, property reports, and more. We also introduce you to our newest innovative solution, which provides immediate access and streamlines data management – ATTOM Cloud.
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