EXHIBIT 8.1
 
                                                              February 24, 1997
 
Avalon Properties, Inc.
15 River Road
Wilton, CT 06897
 
Ladies and Gentlemen:
 
  These opinions are delivered to you in our capacity as counsel to Avalon
Properties, Inc. (the "Company") in connection with the Form S-3 Registration
Statement (the "Registration Statement") filed today by the Company with the
Securities and Exchange Commission under the Securities Act of 1933, as
amended, relating to up to $350,000,000 of the Company's Debt Securities,
Preferred Stock, Common Stock and Warrants. These opinions relate to the
Company's qualification for federal income tax purposes as a real estate
investment trust (a "REIT") under the Internal Revenue Code of l986, as
amended (the "Code"), for taxable years commencing with the Company's taxable
year ending December 31, l993.
 
  In rendering the following opinions, we have examined the Articles of
Incorporation and Bylaws of the Company and such other records, certificates
and documents as we have deemed necessary or appropriate for purposes of
rendering the opinions set forth herein.
 
  We have reviewed the Registration Statement and the descriptions set forth
therein of the Company and its investments and activities. We have relied upon
the representations of officers of the Company that the Company has been and
will be owned and operated in such a manner that the Company has and will
continue to satisfy the requirements for qualification as a REIT under the
Code. We have neither independently investigated nor verified such
representations, and we assume that such representations are true, correct and
complete, and that all representations made "to the best knowledge and belief
of any person(s) or party(ies)" are and will be true, correct and complete as
if made without such qualification. We assume that the Company has been and
will be operated in accordance with applicable laws and the terms and
conditions of applicable documents. In addition, we have relied on certain
additional facts and assumptions described below.
 
  In rendering the opinions set forth herein, we have assumed (i) the
genuineness of all signatures on documents we have examined, (ii) the
authenticity of all documents submitted to us as originals, (iii) the
conformity to the original documents of all documents submitted to us as
copies, (iv) the conformity of final documents to all documents submitted to
us as drafts, (v) the authority and capacity of the individual or individuals
who executed any such documents on behalf of any person, (vi) the accuracy and
completeness of all records made available to us and (vii) the factual
accuracy of all representations, warranties and other statements made by all
parties. We have also assumed, without investigation, that all documents,
certificates, representations, warranties and covenants on which we have
relied in rendering the opinions set forth below and that were given or dated
earlier than the date of this letter continue to remain accurate, insofar as
relevant to the opinions set forth herein, from such earlier date through and
including the date of this letter.
 
  The conclusions set forth below are based upon the Code, the Income Tax
Regulations and Procedure and Administration Regulations promulgated
thereunder and existing administrative and judicial interpretations thereof,
all of which are subject to change. No assurance can therefore be given that
the federal income tax consequences described below will not be altered in the
future.
 
  Based upon and subject to the foregoing, we are of the opinion that (i)
commencing with the Company's taxable year ending December 31, 1993, the
Company has been organized in conformity with the requirements for
qualification as a REIT, (ii) the form of organization of the Company, its
operations through the date hereof and its proposed operations for future
periods, are such as to enable the Company to qualify as a REIT under the Code
for subsequent taxable years provided that in each such year the Company meets
the applicable asset

 
February 24, 1997
Page 2
 
composition, source of income, Avalon Properties, Inc. shareholder
diversification, distribution, recordkeeping and other requirements of the Code
necessary for a corporation to qualify as a REIT, and (iii) the statements in
the Registration Statement set forth under the caption "Federal Income Tax
Considerations," to the extent such information constitutes matters of law,
summaries of legal matters, or legal conclusions, have been reviewed by us and
are accurate in all respects.
 
  We express no opinion with respect to the transactions described herein and
in the Registration Statement other than those expressly set forth herein. You
should recognize that our opinions are not binding on the Internal Revenue
Service ("the IRS") and that the IRS may disagree with the opinions contained
herein. Although we believe that our opinions will be sustained if challenged,
there can be no assurance that this will be the case. Except as specifically
discussed above, the opinions expressed herein are based upon the law as it
currently exists. Consequently, future changes in the law may cause the federal
income tax treatment of the transactions described herein to be materially and
adversely different from that described above.
 
  We consent to being named as Counsel to the Company in the Registration
Statement, to the references in the Registration Statement to our firm and to
the inclusion of this opinion letter as an exhibit to the Registration
Statement.
 
                                          Very truly yours,
 
                                          Goodwin, Procter & Hoar LLP