ATTOM: New Jersey, Illinois, California Have Highest Concentration of ‘Vulnerable’ Housing Markets

ATTOM, Irvine, Calif., released a Special Housing Risk Report spotlighting county-level housing markets around the United States that are more or less vulnerable to declines, based on home affordability, unemployment and other measures in the first quarter.

The report shows New Jersey, Illinois and inland California had the highest concentrations of the most at-risk markets in the first quarter – with the biggest clusters in the New York City and Chicago areas. Most southern states were less exposed.

The first-quarter patterns – based on home affordability, underwater mortgages, foreclosures and unemployment – found New Jersey, Illinois and California had 34 of the 50 counties most vulnerable to the potential declines. The 50 most at-risk included eight counties in the Chicago metropolitan area, six near New York City and 10 sprinkled throughout northern, central and southern California.

Elsewhere, the rest of the top 50 counties were scattered mainly along the East Coast and in the Midwest. They included three each in the Cleveland and Philadelphia metropolitan areas, plus two of Delaware’s three counties. At the other end of the risk spectrum, the South had the highest concentration of markets considered least vulnerable to falling housing markets.

“While the housing market has been exceptionally strong over the past few years, that doesn’t mean there aren’t areas of potential vulnerability if economic conditions continue to weaken,” said Rick Sharga, executive vice president of market intelligence at ATTOM. “Housing markets with poor affordability and relatively high rates of unemployment, underwater loans, and foreclosure activity could be at risk if we enter a recession or even face a more modest downturn.”