Despite the pandemic receding and a housing market cooldown, some housing markets at the county level are still susceptible to damage from the pandemic, according to a new report from ATTOM.
The Q3 2021 Special Coronavirus Report showed that New Jersey, Illinois, and Delaware had the highest concentrations of at-risk markets, totaling 26 of the 50 counties whose housing markets might be most impacted by Covid-19.
To determine risk to the market, the report looked at the percentage of homes facing possible foreclosure, the portion with mortgage balances exceeding property values, and the percentage of average local wages required to pay for homeownership expenses on median-priced houses or condos.
Included on the list are eight counties in the Chicago metro (Cook, De Kalb, Du Page, Kane, Kendall, Lake, McHenry, and Will counties), six near New York City (Essex, Hunterdon, Monmouth, Ocean, Passaic, and Sussex counties in New Jersey and Rockland County in New York), and 2 of Delaware’s three counties, as well as three counties near Philadelphia.
The rest of the list is largely comprised of counties along the East coast. Of those, only Florida had more than 3 in the top 50: Bay County (Panama City), Clay County (outside Jacksonville), Lake County (Orlando), and Miami-Dade County.
Only two counties in the West made it into the top 50, both in California. The West had the highest concentration of markets considered least vulnerable.
“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.
Teta stressed that the findings don’t suggest trouble in every market. Instead, some markets are more at risk than others to continued financial pressures brought about by the pandemic.
The market is in a seasonal cooldown, but the cost of homeownership remains high year-over-year. September’s inventory of active listings was down 52.2% compared to 2019, and stock shortages continue to squeeze prices.
Washington is trying to mitigate the lack of housing under $200k by expanding affordable housing programs. Freddie Mac announced plans to offer at least $3 billion in Single-Family affordable housing bonds, intended to boost homeownership in low-income markets.
In the most at-risk counties, underwater mortgages, unaffordable housing, and foreclosure continue at higher levels than elsewhere. Homeownership costs– including mortgage payments, property taxes, and insurance– accounted for more than 30% of average local wages in 27 of the 50 counties, while at least 10% of mortgages were underwater in 37. More than 1 in 2,000 homes had a foreclosure filing in 36 of the counties.
The least vulnerable counties were largely concentrated in the South and Midwest, accounting for 33 of the 50 least likely to face significant risk from the economic impacts of Covid-19.