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Opportunity zones churn mixed results for Forsyth housing markets

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The establishment of U.S. Treasury-certified opportunity zones in Forsyth County continues to provide mixed results to residential markets in nine census tracts reviewed in a second-quarter report released Thursday by Attom Data Solutions.

Opportunity zones, launched in May 2018, are economically distressed census tracts qualified to receive private investments through a new vehicle known as opportunity funds.

The goal is connecting those tracts with investors, offering tax credits and other tax incentives to get investors involved.

All but one of the 11 Forsyth tracts are in the central part of Winston-Salem. They account for more than 25,000 residents. They are among 47 in the Triad and Northwest North Carolina, and 252 statewide.

The eight Forsyth tracts reviewed by Attom for the first quarter are:

* Tract 1, in the central business district. The average sales price was $283,750, compared with $294,000 in the first quarter and $230,000 a year ago.

* Tract 2, in the central business district; The average sales price was $211,500, compared with no report in the first quarter and $285,000 a year ago.

* Tract 3.02, the Kimberly Park neighborhood. The average sales price was $58,461, compared with $44,545 in the first quarter and $59,500 a year ago.

* Tract 7 contains Innovation Quarter in downtown Winston-Salem. The average sales price was $91,500, compared with $50,000 in the first quarter and $42,000 a year ago.

* Tract 8.02 covers the Atkins Community Development Corp. The average sales price was $101,500, compared with $58,500 for the first quarter and $40,000 a year ago.

* Tract 14, which contains Whitaker Park, a 1.7-million-square-foot former R.J. Reynolds Tobacco Co. plant. The campus is part of a high-profile renovation project being undertaken by Whitaker Park Development Authority Inc. and mixed-use developer Chris Harrison.

The average home sale price was $140,000, compared with $116,000 in the first quarter and $117,000 a year ago.

* Tract 16.02, Smith Reynolds Airport and neighborhoods south of the airport. The average sales price was $52,464, compared with $41,000 in the first quarter and $67,500 a year ago.

* Tract 17, which contains Lakeside Villas multifamily housing development. The average home sale price when the opportunity zone program began was $145,000. It has since fluctuated from a low of $55,000 in the third quarter of 2020 to $200,000 in the first quarter of 2022. It was at $190,000 in the second quarter of 2022.

* Tract 33.13, which contains Horneytown Road. The average home sales price was $285,000, compared with $205,500 in the first quarter and no report a year ago.

Not reviewed for the second quarter were: Tract 3.01 is in the Boston-Thurmond neighborhood; Tract 8.01, Winston-Salem State University, the UNC School of the Arts and Happy Hill neighborhood.

The program was created by Congress as part of the 2017 tax reform deal as a new tax-incentive designed to drive long-term capital to distressed communities.

The legislation creates a tax break for qualified investors who wish to re-invest unrealized capital gains, avoiding standard capital gain tax obligations. The program authorized each state to designate up to 25% of its total low-income census tracts as qualified opportunity zones.

Low-income census tracks are areas where the poverty rate is 20% or greater and/or family income is less than 80% of the area’s median income.

Winston-Salem city officials consider opportunity zones as another “tool in the economic and community development toolbox that can be used to help spur private development and redevelopment in some of the areas in our community that have not seen the growth.”

“We truly hope that it will help prime the pump to create new investment and jobs for our residents.”

There are 12 tracts in Guilford County, along with four in Alamance, three each in Randolph, Rockingham, Surry and Wilkes, two in Davidson and one each in Alleghany, Ashe, Davie, Stokes, Watauga and Yadkin.

The certified opportunity zones list for North Carolina has at least one low-income census tract in each of the state’s 100 counties. Tracts that touch the state’s major industrial-site development areas and hurricane-impact areas are included.

“Homes in most opportunity zones represent affordable options for real estate investors and consumer homebuyers in a market where both home prices and mortgage rates have been rising,” said Rick Sharga, executive vice president of market intelligence at Attom.

“With home prices up 15% compared with a year ago, and mortgage rates nearly doubled, both investors and homebuyers may find the lower purchase prices for homes available in opportunity zones very attractive.”

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@rcraverWSJ

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