ATTOM: Northeast Housing Markets at Highest Risk of Pandemic Economic Impact

ATTOM Data Solutions, Irvine, Calif., said its third-quarter Special Report shows pockets of the Northeast and Mid-Atlantic regions most at risk, with clusters in the New York City, Baltimore, Philadelphia and Washington, D.C. areas – while the West and now Midwest are less vulnerable.

The report Connecticut, New York, New Jersey, Pennsylvania, Maryland and Delaware had 32 of the 50 counties most vulnerable to the economic impact of the pandemic in the third quarter. They included five suburban counties in the New York City metropolitan area, four around Washington, D.C., four around Philadelphia, four around Baltimore and seven of Connecticut’s eight counties.

The only four western counties among the top 50 were in northern California and Hawaii, while Illinois had the only six in the Midwest. Another eight were loosely scattered across five southern states – Florida, Louisiana, North Carolina, Texas and Virginia.

ATTOM said third quarter trends generally continued from those found in the first and second quarters of 2020, but with different concentrations around several major metropolitan areas. The number of counties among the top 50 most at-risk was down from 11 to five in the New York City area, and from eight to three in the Chicago area, but up from two to four in the Baltimore region.

Markets are considered more or less at risk based on the percentage of homes currently facing possible foreclosure, the portion of homes with mortgage balances that exceed the estimated property value, and the percentage of local wages required to pay for major home ownership expenses.

“The U.S. housing market continues to show remarkable resilience during a time of widespread economic trouble and high unemployment stemming from the virus pandemic. But amid continued price gains, pockets around the country face greater risk of a fall, especially in and around the Northeast,” said Todd Teta, chief product officer with ATTOM Data Solutions. “There is much uncertainty ahead, especially if another virus wave hits. We will continue to closely monitor home prices and sale patterns to see if, how and where the pandemic starts rattling local markets.”

The report said 20 of the 50 U.S. counties most at-risk in the third quarter from housing-market troubles connected to the pandemic (among the 487 counties with sufficient data) included five in the New York City suburbs (Bergen, Essex, Passaic and Sussex counties in New Jersey, along with Orange County, N.Y.) and four around Philadelphia (Burlington, Camden and Gloucester counties in New Jersey, plus Bucks County, Pa.). Another four counties found most at risk are in the Baltimore metro area: Anne Arundel, Baltimore, Carroll and Howard counties. The three around Chicago are Lake, McHenry and Will counties.

Seven of Connecticut’s eight counties also are in the top 50, including Fairfield, Litchfield, Middlesex, New Haven, New London, Tolland and Windham counties.

The only western counties among the top 50 most at risk from problems connected to the Coronavirus outbreak in the third quarter were Humboldt County (Eureka), Calif.;; Butte County (Chico), Calif.; Shasta County (Redding), Calif., and Hawaii County.

Florida also had three counties in the top 50: Charlotte County (outside Fort Myers), Flagler County (outside Daytona Beach) and Highlands County (Sebring).

“While it’s unlikely that we’ll see a return to the historically high levels of foreclosure activity we saw during the Great Recession, it’s a near-certainty that the number of defaults will increase once the foreclosure moratoria have been lifted, and the CARES Act forbearance program expires,” said Rick Sharga, executive vice president of RealtyTrac, an ATTOM Data Solutions company. “It’s also likely that foreclosures will be concentrated in markets where there’s a dual-trigger – for example, stubbornly high unemployment rates, and homeowners who are underwater on their loans.”