RISMedia
  • News
  • Premier
  • Reports
  • Events
  • Power Broker
  • Newsmakers
  • More
    • Publications
    • Education
No Result
View All Result
  • Agents
  • Brokers
  • Teams
  • Marketing
  • Coaching
  • Technology
  • More
    • Headliners New
    • Luxury
    • Best Practices
    • Consumer
    • National
    • Our Editors
Join Premier
Sign In
RISMedia
  • News
  • Premier
  • Reports
  • Events
  • Power Broker
  • Newsmakers
  • More
    • Publications
    • Education
No Result
View All Result
RISMedia
No Result
View All Result

‘Vulnerable’ Markets Still Retain Optimism for 2022

Home Agents
By Jesse Williams
January 25, 2022
Reading Time: 4 mins read
‘Vulnerable’ Markets Still Retain Optimism for 2022

While real estate has so far not only endured, but thrived in the chaotic winds of the pandemic, that does not mean housing markets are immune to economic damage caused by the virus. Even as job markets have made tremendous progress in recovering, other macroeconomic woes could spill over into real estate, especially in particular regions.

It is those regions that were the subject of a recent ATTOM Data Solutions Special Coronavirus Report, which highlighted parts of the country that the company deemed especially vulnerable—or especially resistant—to the underlying economic ravages of the pandemic.

“The virus remains a potent threat to the broader economy and the housing market, with some of the same counties we’ve seen in the past continuing to look vulnerable to potential downturns,” said ATTOM chief product officer Todd Teta, in a statement. “No immediate warning signs hang over any one part of the country, but pockets are more vulnerable to the market taking a turn for the worse.”

Both Teta and real estate professionals in these regions—which are broadly concentrated in California, New Jersey, Chicago, Philadelphia and Delaware—emphasized that there was no immediate reason to expect a real estate downturn in 2022. Vulnerability was determined by the relative unaffordability of houses along with foreclosures and “underwater” mortgages—where people owe more on their house than it is worth.

Jordan Levine, vice president VP and senior economist for the California Association of REALTORS® (CAR) tells RISMedia that affordability is and has been a major problem, but the real estate market there remains fundamentally strong.

“There’s always a kind of external shock that could happen, but as far as a kind of home-grown, housing-market led downturn like we had in 2006…those fundamental issues are largely absent largely, this time around,” he says. “I think this kind of at-risk factor is just picking up on this affordability dynamic across the country.”

California boasts two of the five least affordable counties in the country, according to the ATTOM report, which measured the proportion of local wages absorbed by major homeownership costs on a median-priced single-family home. El Dorado County near Sacramento requires 52.5% of local wages to support a home, while Riverside County in the East Los Angeles suburbs requires 52%.

But Levine pointed out that the report used local wages as its baseline, while many people who live in these counties are making significantly more than this working remotely or commuting.

“In at least some of those counties, when you look at measures like the local wages relative to the median prices there are some artifacts of the data in there,” he says. “Those are areas where there has been a lot of in-migration…so I think that the income of those buyers and also the homes that those folks are potentially buying tend to skew upward the median price.”

As far as other metrics, the report found that even with the unprecedented appreciation of home values in 2021, 7.1% of residential mortgages nationwide were underwater in the third quarter of 2021, compared to 10% of mortgages in 18 of the most vulnerable counties. Counties that were considered vulnerable also had a higher level of foreclosure filings compared to the country at large, though foreclosures have remained lower than expected after federal protections were lifted late last summer.

“The amount of folks with negative equity isn’t a huge concern to me at this point, and the delinquency rates continue to fall,” he says.

Another area of concern in the report was New Jersey, in the New York and Philadelphia suburbs where affordability and supply have remained long-term problems. Terrie O’Connor, broker-owner of Terrie O’Connor Realtors, has worked in this region for decades and says she also is not particularly concerned about any sort of dramatic downturn, either.

“New Jersey is still basically a fairly vibrant market, it’s just very much tipped on the side of sellers right now and buyers are struggling,” she says. “Bidding wars are still going on, etc. I can see some problems arising perhaps because we don’t have the inventory, so we may have fewer transactions…and that’s kind of across the board.”

But this is not any more acute of an issue in her region than in many other areas around the country, she adds.

“I don’t know why it is more unique than many other places,” O’Connor says.

Like California, a lot of people living in these affluent New Jersey counties are making higher wages than the area median income, O’Connor points out. They are also less likely to lose jobs or income based on the up-and-down economic roller-coaster of the pandemic, which has disproportionately harmed lower-earning families.

Likely the New Jersey region simply won’t be able to sustain the same kind of explosive growth it saw in 2021, O’Connor says, without inventory, and getting new inventory is especially difficult due to the expense and scarcity of land—something that won’t go away even if supply chain blockages are resolved and building material costs drop.

“For builders it’s a little bit more difficult—you don’t see the kind of new construction here that you see in areas of the Carolinas and Texas and areas like that where they have a lot of land to spill into,” O’Connor says.

But those issues don’t translate into any kind of a “doomsday” market downturn as demand remains strong and the economy continues a broad recovery even in the face of inflation and new disruptions caused by the Omicron variant, according to O’Connor. Levine agrees that moderated growth in these regions is the most reasonable expectation—again, barring some “external shock.”

“It’s the broader challenge of affordability in general,” he says. “You got more of your eggs in a smaller basket and that creates inherent challenges…but that doesn’t mean that we’re on the precipice.”

Jesse Williams is RISMedia’s associate online editor. Email him your real estate news ideas jwilliams@rismedia.com.

Tags: ATTOMCOVID-19DataData Solutions Special Coronavirus ReportJordan LevinePandemicReal Estate MarketresearchTerrie O'ConnorTodd Teta
ShareTweetShare

Jesse Williams

Jesse Williams is a senior editor for RISMedia.

Related Posts

Fed Decelerates, Raising Hope for Housing Rebound
Agents

Fed Decelerates, Raising Hope for Housing Rebound

February 2, 2023
Buyers Gain Bargaining Power, but Remain Deterred
Agents

Buyers Gain Bargaining Power, but Remain Deterred

February 2, 2023
UtahRealEstate.com MLS Launches New Showing-Management Software
Agents

UtahRealEstate.com MLS Launches New Showing-Management Software

February 2, 2023
Preparing for Every Stage of Homeownership
Agents

Preparing for Every Stage of Homeownership

February 2, 2023
Power Broker Insights: A Strategic Reset for 2023
Agents

Power Broker Insights: A Strategic Reset for 2023

February 2, 2023
Second Century Ventures Announces Selections for 2023 REACH Australia Technology Growth Program
Agents

Second Century Ventures Announces Selections for 2023 REACH Australia Technology Growth Program

February 2, 2023

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Tip of the Day

Help Your Clients Sell for 28% More

Every listing you represent must be updated and move-in ready. Help your clients sell in the fastest amount of time... See how.

Business Tip of the Day provided by

Recent Posts

  • Fed Decelerates, Raising Hope for Housing Rebound
  • Buyers Gain Bargaining Power, but Remain Deterred
  • UtahRealEstate.com MLS Launches New Showing-Management Software

Categories

  • Spotlights
  • Best Practices
  • Advice
  • Marketing
  • Technology
  • Social Media

The Most Important Real Estate News & Events

Click below to receive the latest real estate news and events directly to your inbox.

Sign Up
By signing up, you agree to our TOS and Privacy Policy.

About Blog Our Products Our Team Contact Advertise/Sponsor Media Kit Email Whitelist Terms & Policies ACE Marketing Technologies LLC

© 2023 RISMedia. All Rights Reserved. Design by Real Estate Webmasters.

No Result
View All Result
  • Home
  • Premier
  • Reports
  • News
    • Agents
    • Brokers
    • Teams
    • Consumer
    • Marketing
    • Coaching
    • Technology
    • Headliners New
    • Luxury
    • Best Practices
    • National
    • Our Editors
  • Publications
    • Real Estate Magazine
    • Past Issues
    • Custom Covers
  • Events
    • Upcoming Events
    • Podcasts
    • Event Coverage
  • Education
    • Get Licensed
    • REALTOR® Courses
    • Continuing Education
    • Luxury Designation
    • Real Estate Tools
  • Newsmakers
    • 2023 Newsmakers
    • 2022 Newsmakers
    • 2021 Newsmakers
    • 2020 Newsmakers
    • 2019 Newsmakers
  • Power Broker
    • 2022 Power Broker
    • 2021 Power Broker
    • 2020 Power Broker
    • 2019 Power Broker
  • Join Premier
  • Sign In

© 2023 RISMedia. All Rights Reserved. Design by Real Estate Webmasters.

First Month Of Premier For Only $5!

Join Premier
logo-rismedia-white
x
X