By Anayat Durrani

Median single-family home prices rose from the second quarter of 2020 to the second quarter of 2021 in 75% of Opportunity Zones and increased by at least 15% in about half of them, according to ATTOM’s second-quarter 2021 U.S. Home Equity & Underwater Report.

“Data is clearly showing that we are going to continue to see an upwards trend as to housing prices in the foreseeable future, the question remains whether such increases will be sustainable,” says Shahzad Qadri, a partner at Wong Fleming and Chair of the Immigration Law practice group.

The report looked at 5,236 Opportunity Zones nationwide with sales data to analyze—those with at least five home sales in the second quarter of 2021. The report found that price patterns in Opportunity Zones remained in line with trends in other parts of the U.S., and surpassing them similar to the first quarter of this year. 

Opportunity Zones remained on track with national home-price trends

The value of homes located in Opportunity Zones fell behind the national median of $305,000 in the second quarter of 2021, with some three-quarters of the zones showing typical second-quarter prices under the national figure.  About 39% had median prices of below $150,000 in the second quarter, down from 47% a year earlier.

The economic impact from the pandemic continued to be felt the most in lower-income communities that had most of the zones targeted for tax breaks set to jumpstart economic redevelopment. However, despite this, Opportunity Zones remained on track with national home-price trends as increases were nearly the same as the nationwide boom now in its tenth year.

Todd Teta, chief product officer with ATTOM, said in a statement, that the data shows the housing markets “kept chugging along” in the country’s poorest neighborhood and that the home-price boom knows no boundaries. He said even as the pandemic ravished the economy, values continued to rise inside Opportunity Zones at around the same rate as they did in other areas.

“It clearly is a golden opportunity for the OZ industry as the demand continues to increase. If the industry uses this opportunity to provide affordable housing for people being priced out of areas it can prove to be a win-win situation for all involved,” says Qadri.

Report data shows the Opportunity Zones are working

Qadri says the report is evidence that the program is working and adds, “what we as an industry need to look at is how we can make it more effective and impactful.”

Ashley Tison, attorney and founder of OZ Consultants, also says the program is working as demonstrated by the increase in home prices in Opportunity Zones as compared to other areas.

“This confirms that the true goal of the Opportunity Zone program is working, namely that it is creating trackable disparate impact in the areas that have been designated,” says Tison. “We have established numerous captive and syndicated QOFs for investors buying, renovating and/or building single family rentals in QOZs.”

In the states with at least 20 Opportunity Zones, those with the largest percentage of zones where median prices rose, year over year, during the second quarter of 2021 included New Hampshire, Massachusetts, Idaho, Utah, and Arizona. The Midwest continued in the second quarter to have the greatest number of Opportunity Zone tracts with a median home price of less than $150,000, followed by the South, the Northeast and the West.


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