Housing markets in pockets of the northeast and mid-Atlantic regions were most vulnerable to the impact of the coronavirus pandemic in the third quarter, according to a new report from ATTOM Data Solutions.
ATTOM’s third-quarter 2020 Special Report identified clusters in the New York City, Baltimore, Philadelphia and Washington, D.C., as the most vulnerable areas.
According to 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.
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.
“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,” ATTOM Chief Product Officer Todd Teta said in a release. “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.”
ATTOM said 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.
ATTOM said the most-vulnerable counties 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.
“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,” RealtyTrac Executive Vice President Rick Sharga said. “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.”