While there’s been improvement on the whole since the pandemic came to light almost two years ago, the economy is still in the midst of recovery, with some areas currently at risk while others have mostly recovered. According to a new report from ATTOM, metro areas like Chicago, New York City and Philadelphia have clusters of vulnerable counties that are still at elevated risk from the pandemic’s fallout.
How can risk be measured as it relates to a health crisis? ATTOM analyzed the percentage of homes facing possible foreclosure, the numbers of properties with mortgage balances exceeding estimated property values and the percentage of average local wages required to pay for major homeownership expenses on median-priced homes or condos.
“There’s growing reason to think the coronavirus pandemic may finally be heading into the history books as case numbers have dropped significantly in the past month or so. But it still poses a significant threat to the economy, with some housing markets in pockets of the country remaining at higher risk than others,” said Todd Teta, chief product officer with ATTOM, in a statement.
At-Risk Markets Hold Pockets in Metro Areas
New Jersey, Illinois and Delaware had the highest concentrations of the most at-risk markets in the third quarter, according to the report. And the biggest clusters reside in the New York City and Chicago areas—the West remains less exposed.
Additionally, twenty of the 50 U.S. counties most vulnerable are in metro areas around New York, New York; Chicago, Illinois; Philadelphia, Pennsylvania; and Delaware.
Within these areas, residents are challenged with higher levels of unaffordable housing, underwater mortgages and increased foreclosure rates. Major homeownership costs like mortgage payments, property taxes and insurance (on median-priced, single-family homes) made up more than 30% of average local wages in 27 of the 50 counties most vulnerable to these market problems.
Recovery Hot Spots in South and Midwest
Of the 50 least vulnerable counties, 33 were in the South and Midwest, according to the report, with Oregon claiming six of them. Two were Portland metro counties (Multnomah and Washington counties) and five were in Texas, including two in the Austin area (Travis and Williamson counties).
Here, residents have lower levels of unaffordable housing, underwater mortgages and foreclosure activity. Major homeownership costs consumed less than 30% of average local wages in 36 of the 50 counties least at risk.
”It’s important to stress that this doesn’t mean that any one area faces imminent danger, especially given how well the housing market has avoided major problems during the pandemic,” added Teta. “Rather, some are more at risk than others. We will continue watching prices, affordability, distressed property counts and other measures to gauge the risk, as long as the pandemic remains a big issue facing the country.”
Liz Dominguez is RISMedia’s senior online editor. Email her your real estate news ideas to lizd@rismedia.com.
