Which housing markets have been most vulnerable to COVID?

Most and least at-risk US counties revealed in coronavirus report

Which housing markets have been most vulnerable to COVID?

The housing markets in Illinois, New Jersey and Delaware counties are more vulnerable to the impact of the ongoing coronavirus pandemic than elsewhere in the US, according to a report by property analytics firm, ATTOM.

The 2021 Special Coronavirus report released last week highlighted county-level housing markets vulnerable to damage from the ongoing COVID-19 virus in the US during the third quarter, based on the percentage of homes facing possible foreclosure, among other factors.

The conclusions were drawn from an analysis of the most recent home affordability, equity and foreclosure reports prepared by the property database curator. Counties were ranked in each category, from lowest to highest, with the overall conclusion based on a combination of the three.

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The report revealed that New Jersey, Illinois and Delaware had 26 of the 50 counties that were most exposed to the potential housing-related impacts of the pandemic.

Of these, eight were in the Chicago metropolitan area (Cook, De Kalb, Du Page, Kane, Kendall, Lake, McHenry and Will counties), seven in the New York City metropolitan area (Essex, Hunterdon, Monmouth, Ocean, Passaic and Sussex counties in New Jersey and Rockland County in New York), and two in Delaware - Kent County (Dover) and Sussex County (Georgetown).  

By contrast, the least vulnerable markets to pandemic-related damage were in the West, with just two western counties making it into the top 50, both of which were in California.

Counties least at-risk were concentrated in the South and Midwest, with Oregon listed as having six of the 50 least at-risk counties, including two in the Portland metropolitan area (Multnomah and Washington) and five in Texas, including two in the Austin area (Travis and Williamson).

The rest of the 50 most vulnerable counties were dotted mostly along the East Coast states, with only Florida appearing with more than three counties in the top 50. In addition, three counties in the suburbs of Philadelphia also made the top 50 list.

According to ATTOM, markets were considered to be “more or less at risk” based on those homes with negative equity, which are also known as underwater mortgages.

Less-vulnerable counties had lower levels of unaffordable housing, underwater mortgages and foreclosure activity.

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The report cited declining home affordability, slumping investor profits and rising inflation as “signs of a possible slowdown”. It said the housing market was part of a decade-long boom that was “super-heated”, with median single-family home prices continuing to rise above 10% on an annual basis across much of the US during the third quarter.

It added that there could yet be more home-price increases, now that there was evidence that the pandemic had started to retreat in the last month and that the economy was also expanding.

However, the report warned that the shadow of the pandemic “remains a threat to the economy and the housing market” with the arrival of winter, pointing out that “nearly half the US population remains unvaccinated”.

Todd Teta, ATTOM’s chief product officer, said that although he believed the pandemic “may finally be heading into the history books”, citing the significant drop in case numbers in the past month, the virus still posed a significant threat to the economy, “with some housing markets in pockets of the country remaining at higher risk than others”.

He added: “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. Rather, some are more at risk than others.”

In separate data, according to the just-released S&P CoreLogic Case-Shiller Indices, property prices rose 19.8% year on year in August, maintaining the same level as the previous month, although here as well, data suggested “that the growth in housing prices, while still very strong, may be beginning to decelerate”.

The report also noted that the main pool of buyers remained high-income earners, “with an increase in demand among investors this summer”.