Opportunity Zone housing markets continue to keep up with broader price gains across nation in third quarter 

ATTOM has released its third-quarter 2023 report analyzing qualified low-income Opportunity Zones targeted by Congress for economic redevelopment in the Tax Cuts and Jobs Act of 2017 (see full methodology below). In this report, ATTOM looked at 3,465 zones around the United States with sufficient data to analyze, meaning they had at least five home sales in the third quarter of 2023.  The report found that median single-family home and condo prices rose from the second quarter of 2023 to the third quarter of 2023 in 54 percent of Opportunity Zones around the country and rose at least 5 percent in close to half. The price improvements in and around low-income neighborhoods where the federal government offers tax breaks to spur economic revival, again tracked closely with a nationwide rebound from a temporary dip in home values that hit last year.  The renewed price growth also continued a long-term trend of home values inside Opportunity Zones following along with broader market gains for at least the last three years – an ongoing sign of economic strength inside some of the country’s most distressed communities.  Opportunity Zone markets even showed signs again, by one key measure, of doing slightly better than other neighborhoods around the country during the third quarter of this year. A slightly larger portion of Opportunity Zones versus other locations saw median values rise annually at a faster pace than they did nationwide.  “The third-quarter price data shows that many of the country’s lower-income neighborhoods continue to come back from the brief downturn we saw last year, right along with the rest of the U.S. housing market. While there were exceptions, Opportunity Zones overall saw no extended backslide and continued to benefit from the boom that has spiked home values around the nation for more than a decade,” said Rob Barber, CEO for ATTOM. “That trend is likely connected to financially marginal house hunters getting priced out of more expensive locations and turning to places like Opportunity Zones for affordable homes. This should give investors looking to take advantage of Opportunity Zone tax breaks more welcome news about the potential for those neighborhoods.”  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 they have historically, typical home values in most Opportunity Zones fell well below those in other neighborhoods around the nation in the third quarter of 2023. Median third-quarter prices were less than the U.S. median of $350,000 in 81 percent of Opportunity Zones. That was about the same portion as in earlier periods over the past year. In addition, median prices fell below $200,000 in 49 percent of the zones during the third quarter of 2023.  Considerable price volatility also continued in Opportunity Zones, with median values either dropping or increasing by at least 5 percent in more than three-quarters of those locations from the second quarter of 2023 to the third quarter of 2023. That again likely reflected the small number of sales in many zones.  Still, the latest trends marked the second straight quarter in which Opportunity Zone home values, in general, erased losses seen during the downturn that lasted from the middle of 2022 into early 2023. That highlighted an extended scenario of home-price runups across the U.S. leaving a significant cluster of potential buyers with limited resources and few choices other than the lowest-priced communities. The apparently healthy demand in the third quarter continued even as home-mortgage rates climbed back up toward 8 percent for 30-year fixed-rate loans over the Summer, and inflation inched upward cutting into what buyers could afford.  “Like most places with fewer resources, Opportunity Zones remain especially vulnerable to negative forces affecting the housing market or the broader economy, so we will continue to keep a close watch on prices in those locations,” Barber added. “But the ongoing tight supply of homes for sale combined with high home-buying demand around the country suggests that Opportunity Zones are in a good position to remain on pace with the broader national trends.”  High-level findings from the report:  Median prices of single-family homes and condominiums increased from the second quarter of 2023 to the third quarter of 2023 in 1,862 (54 percent) of the Opportunity Zones around the U.S. with sufficient data to analyze, while decreasing or staying the same in 46 percent. Medians also were up from the third quarter of 2022 to same period this year in 1,880 (58 percent) of those zones with sufficient data. (Among the 3,465 Opportunity Zones included in the report, all had enough data to generate usable median-price comparisons from the second quarter of 2023 to the third quarter of 2023; 3,258 had enough data to make comparisons between the third quarter of 2022 and the third quarter of 2023).  But in a sign that Opportunity Zones again did a bit better than the rest of the country, median prices grew quarterly and annually by at least 5 percent in a higher portion of those areas. Typical values went up at least 5 percent quarterly in 44 percent of Opportunity Zones with enough data to analyze and annually in 49 percent.  In addition, typical price increases exceeded national gains annually in a slightly larger portion of Opportunity Zones than elsewhere. The median single-family home value rose, year over year, by more than the national figure in 47 percent of Opportunity Zones tracts but just 43 percent of tracts outside the zones. (The nationwide median rose 6.1 percent from the third quarter of 2022 to the third quarter of 2023.)  Of the 3,465 zones in the report, 1,124 (32 percent) had median prices in the third quarter of 2023 that were less than $150,000. That was down from 35 percent of those zones a year earlier. Another 564 zones (16 percent) had medians in the third quarter of this year ranging from $150,000 to $199,999.  Median values in the third quarter of 2023 ranged from $200,000 to $299,999 in 827 Opportunity Zones (24 percent) while they topped the nationwide third-quarter median of $350,000 in just 670 (19 percent).  The Midwest continued in the third quarter of 2023 to have larger portions of the lowest-priced Opportunity Zone tracts. Median home prices were less than $175,000 in 66 percent of zones in the Midwest, followed by the Northeast (47 percent), the South (41 percent) and the West (6 percent).  Median household incomes in 87 percent of Opportunity Zones analyzed were less than the medians in the counties where they were located. Median incomes were less than three-quarters of county level figures in 54 percent of those zones and less than half in 14 percent.

Construction sector adds 23,000 jobs in October as unemployment rate falls to 4.0 percent 

The construction industry added 23,000 jobs in October as unemployment rates for the sector hovered near the all-time low for the month, according to an analysis of new government data the Associated General Contractors of America released today. Association officials said the construction industry would likely have hired even more workers to keep pace with strong demand for construction. “Despite the fact pay for hourly craft workers in construction is rising faster than for production employees, contractors are still struggling to find enough skilled workers,” said Ken Simonson, the association’s chief economist. “Both residential and nonresidential construction employers want to hire even more workers.” Construction employment in October totaled 8,033,000, seasonally adjusted, an increase of 23,000 or 0.3 percent from September. The sector has added 219,000 jobs during the past 12 months, a gain of 2.8 percent. Residential building and specialty trade contractors added 13,700 employees in October and 55,600 (1.7 percent) over 12 months. Employment at nonresidential construction firms—nonresidential building and specialty trade contractors along with heavy and civil engineering construction firms—climbed by 8,400 positions for the month and 163,300 (3.6 percent) since October 2022. The unemployment rate among jobseekers with construction experience was 4.0 percent in October, one of the lowest October rates in the 24-year history of the data. A separate government report released earlier this week reported that there were a record-high 438,000 job openings in construction at the end of September, far exceeding the number hired that month and a further sign of contractors’ difficulty in finding qualified workers. Average hourly earnings for production and nonsupervisory employees in construction—covering most onsite craft workers as well as many office workers—climbed by 5.4 percent over the year to $34.64 per hour. Construction firms in September provided a wage “premium” of nearly 19 percent compared to the average hourly earnings for all private-sector production employees. Association officials noted that efforts underway in Congress to exclude the construction industry from the H-2B visa program would only add to the industry’s labor shortages and undermine its ability to complete infrastructure and economic development projects. They urged Congress to boost investments in career and technical education programs and ways to increase the number of visas available for people with construction skills.  “Contractors are trying to keep pace with demand for new infrastructure, clean energy and development projects, among others,” said Stephen E. Sandherr, the association’s chief executive officer. “Limiting to who can work in construction will only undermine the sector’s ability to deliver projects on time and on budget.”

U.S. foreclosure activity remains steady in October 2023 

ATTOM has released its October 2023 U.S. Foreclosure Market Report, which shows there were a total of 34,472 U.S. properties with foreclosure filings — default notices, scheduled auctions or bank repossessions — down 6 percent from a month ago but up 6 percent from a year ago.  “Foreclosure filings continue to paint a concerning picture,” said Rob Barber, CEO at ATTOM. “With foreclosure filings ranging from 31,557 in January 2023 to 34,472 in October 2023, it's evident that challenges in the housing market persist. While we anticipate a likely decline in the coming months due to the holiday season and other seasonal patterns, we do foresee a continued uptick in 2024 as foreclosure filings make their way through the pipeline.”  Delaware, Ohio and New Jersey post highest foreclosure rates  Nationwide one in every 4,051 housing units had a foreclosure filing in October 2023. States with the highest foreclosure rates were Delaware (one in every 2,432 housing units with a foreclosure filing); Ohio (one in every 2,492 housing units); New Jersey (one in every 2,550 housing units); Maryland (one in every 2,565 housing units); and South Carolina (one in every 2,569 housing units).  Among the 223 metropolitan statistical areas with a population of at least 200,000, those with the highest foreclosure rates in October 2023 were Cleveland, OH (one in every 1,403 housing units with a foreclosure filing); Atlantic City, NJ (one in every 1,547 housing units); Spartanburg, SC (one in every 1,708 housing units); Bakersfield, CA (one in every 1,785 housing units); and Jacksonville, NC (one in every 1,848 housing units).  Those metropolitan areas with a population greater than 1 million with the worst foreclosure rates in October 2023, including Cleveland, OH, were: Miami-Fort Lauderdale, FL (one in every 2,180 housing units); Riverside, CA (one in every 2,254 housing units); Houston, TX (one in every 2,269 housing units); and Philadelphia, PA (one in every 2,323 housing units).  Greatest numbers of foreclosure starts in Texas, California, and Florida  Lenders started the foreclosure process on 23,343 U.S. properties in October 2023, down 7 percent from last month but up 7 percent from a year ago.  States that had the greatest number of foreclosure starts in October 2023 included: Texas (2,966 foreclosure starts); California (2,747 foreclosure starts); Florida (2,319 foreclosure starts); New York (1,405 foreclosure starts); and Georgia (1,054 foreclosure starts).  Those major metropolitan areas with a population greater than 1 million that had the greatest number of foreclosure starts in October 2023 included: New York, NY (1,412 foreclosure starts); Houston, TX (1,132 foreclosure starts); Miami-Fort Lauderdale, FL (941 foreclosure starts); Los Angeles, CA (808 foreclosure starts); and Chicago, IL (705 foreclosure starts).  Foreclosure completion numbers remain unchanged from last month  Lenders repossessed 3,332 U.S. properties through completed foreclosures (REOs) in October 2023, down less than 1 percent from last month and down 20 percent from last year.  States that had the greatest number of REOs in October 2023, included: Pennsylvania (297 REOs); Illinois (273 REOs); Ohio (231 REOs); California (219 REOs); and Michigan (216 REOs).  Those major metropolitan statistical areas (MSAs) with a population greater than 1 million that saw the greatest number of REOs in October 2023 included: Chicago, IL (213 REOs); New York, NY (166 REOs); Philadelphia, PA (102 REOs); Washington, DC (79 REOs); and Detroit, MI (76 REOs). 

Alliance Residential opens Broadstone Optimist Park in Charlotte 

Alliance Residential Company, one of the largest multifamily developers in the nation, announced today the opening of Broadstone Optimist Park, a luxury multifamily community in Charlotte, North Carolina, located at 2010 N. Brevard St. The community, which is one of seven active projects by Alliance in the Charlotte market, features a mix of 323 studio, one and two-bedroom apartment units and townhomes, ranging in size from 600 to 1,368 square feet.  “We're thrilled to welcome residents to this stunning community, the design of which is a tribute to the tradespeople who contributed to the growth and vibrancy of the Optimist Park neighborhood during its industrial past,” said Alliance Residential managing director Donald Santos. “While this is one of many amazing projects in the market by Alliance, Broadstone Optimist Park brings a unique design flair and offers best-in-class amenities. Residents are sure to love the walkability and easy access to the dining, arts, and entertainment available nearby in Villa Heights, Optimist Hall, and NoDa.”  With a Charlotte-based design team that includes architect Cline Design Associates, civil engineer The John R. McAdams Company, and interior designer LS3P,units feature two distinct interior finish schemes, premium cabinets, quartz countertops, top of the line stainless steel appliances, sleek Moen plumbing fixtures and premium plank flooring in the living areas.  The community boasts an impressive list of state-of-the-art features, including a resort-style pool with in-pool loungers and private cabanas, a social courtyard with outdoor grill stations, dining areas, games, and firepits, a fitness center with custom cardio, strength, and cross training equipment, an indoor/outdoor clubroom adjacent to the pool that features additional grill stations, a Big Green Egg, and a pizza oven , multiple co-working spaces, a 24-hour Luxer mail package system, custom art exhibits from local artists,  a podcast recording studio, and an indoor/outdoor sky lounge with a spectacular views of the Charlotte skyline. The community also offers 410 parking spaces including 40 EV charging stations spaces.  Themed the ‘Birth of a City’, the community design is a nod to the mill workers, carpenters, electricians, masons, and other tradespeople that built the neighborhood. Residents will experience a modern yet timeless design. The gritty but innovative atmosphere can be seen in the art program as well as in the textures and materials selected in the furniture and accessories which include wood tones, brick veneer along entrances, copper accents, classic light fixtures, and more.  Broadstone Optimist Park is centrally located in Historic Optimist Park, just steps away from the 25th Street Light Rail Station, providing residents easy access to the greater Charlotte Metropolitan Area. The community is also walkable to the newly opened Urban District Market food hall, which has quickly become a notable destination for foodies in Charlotte. Residents will also have easy access to iconic restaurants in the area and some of the region's finest breweries including Free Range Brewery, Heist Brewery, Birdsong Brewery, Rhino Market, Optimist Hall, and Seoul Food Meat Company.  The community is also located near major employers including Atrium Health, Wells Fargo, Bank of America, and others. Additionally, it is a short distance from Uptown, NoDa, South End, and Interstate 277. Charlotte’s Optimist Park neighborhood is conveniently situated between Uptown and the University area, Charlotte's two largest employment hubs which employ close to 200,000 people collectively.  Broadstone Optimist Park is one of seven active projects in the Charlotte market for Alliance. The company recently announced plans to develop nearby Prose NoDa and Broadstone West End and is also expected to welcome residents to Broadstone Craft and Prose Rhyne in 2023, and The Boulevard a Broadstone Community and Prose McCollough Station in 2024. Additionally, Alliance Residential recently opened Prose New Hope in Raleigh with additional developments planned in the Charleston and Raleigh-Durham markets.  About Alliance Residential Company Alliance is one of the largest and most active rental residential real estate developers in the United States. Headquartered in Scottsdale, Arizona with 19 regional offices, Alliance is focused on the development, construction, and acquisition of residential communities across 16 States and 39 metropolitan markets.  Alliance develops high end Broadstone multifamily communities, Prose quality workforce housing communities, Holden senior housing communities, and Silveray build to rent communities. Additionally, Alliance created Alliance Industrial to expand into industrial warehouse and distribution development.