Markets on the East Coast and in Northern Illinois were most vulnerable to the economic effects of the coronavirus pandemic during the second quarter, according to a quarterly coronavirus market impact report released by Attom Data Solutions Friday.
A swath of states along the East Coast from Connecticut to Florida, as well as Illinois, encompassed 43 out of the 50 counties most susceptible to the virus’ economic impact. Clusters of at-risk counties were found in New York City (11 counties), Chicago (7 counties), Washington, D.C. (5 counties), Baltimore (4 counties) and parts of California (4 counties).
In Attom’s first quarter special report on the pandemic’s effect on the market, New Jersey and Florida contained 24 of the top 50 most at-risk counties, while Maryland had two, Illinois had five and California had one.
The news comes just about one week after Attom reported on home prices beginning to show signs of falling as a result of the pandemic.
“Home sales data from around the country is starting to show that eight years of price gains may be coming to an end amid the economic damage flowing from the virus pandemic,” Todd Teta, chief product officer at Attom Data Solutions, said in a statement. “It’s still too early to make any definitive calls, but the latest numbers show storm clouds gathering over the market. With this second special report on the potential impact of the pandemic, we see pockets around the country that appear more or less poised to withstand downward pressure on prices and other market conditions.”
At-risk markets are identified by the percentage of homes facing possible foreclosure, the portion of homes with mortgage balances that exceed the estimated property value and the percentage of local wages needed to pay for major home ownership expenses. For this report, Attom drew on data from its most recent home affordability, home equity and foreclosure reports.
The 11 most at-risk counties in the New York City suburbs included Bergen, Essex, Hunterdon, Middlesex, Sussex and Union counties in New Jersey, as well as Nassau, Orange, Rockland, Suffolk and Westchester counties in New York.
Near the Chicago metro area, at-risk counties included Cook, DeKalb, DuPage, Kendall, Lake, McHenry and Will counties.
The most at-risk counties around Washington, D.C. were Charles, Prince George’s and Frederick counties in Maryland, as well as Spotsylvania and Stafford counties in Virginia. In the northeastern region of Maryland, Baltimore, Carroll, Cecil and Harford counties were most at-risk.
Connecticut’s at-risk counties included Litchfield, Middlesex, New Haven, Tolland and Windham.
The only at-risk counties on the West Coast were Humbolt County (Eureka, California), Madera County (outside Merced, California), Riverside County (outside Los Angeles, California) and Shasta County (Redding, California).
In 43 out of the 50 counties most vulnerable to negative impacts on the housing market as a result of the pandemic, major home ownership costs (such as mortgage, property taxes and insurance) consumed more than 30 percent of average local wages.
In 36 out of the 50 most at-risk counties, at least 15 percent of mortgages were underwater (owners owed more than their properties were worth). Counties with the highest underwater rates included Sussex County, New Jersey (39.2 percent); Monroe County, Pennsylvania (36.3 percent); and Cumberland County, New Jersey (35.7 percent).
In 47 out of the 50 most at-risk counties, more than one in 750 residential properties faced a foreclosure action. Those counties with the highest foreclosure rates were Cumberland County, New Jersey (one in every 180 properties facing possible foreclosure); Sussex County, New Jersey (one in every 210 counties); and Camden County, New Jersey (one in every 231 counties).
Most of the least at-risk counties were distributed across Colorado, Oregon, Texas and Wisconsin with 26 out of 50 counties located in these states.
Major home ownership costs consumed less than 30 percent of average local wages in just 19 out of the 50 least at-risk counties. However, less than 15 percent of mortgages were underwater in nearly all of the least at-risk counties — in 49 out of 50. In all 50 of these counties, less than one in 750 residential properties face a foreclosure action.