A lot of housing market risk is concentrated in relatively small portions of the country, according to a report from real estate data vendor ATTOM. The company examined counties in home affordability, numbers of underwater mortgages, foreclosures, and unemployment. Rankings were based on a combination of these categories in 590 counties with enough data to analyze in the first quarter of 2024.
“The report shows that California, New Jersey, and Illinois once again had the highest concentrations of the most-at-risk markets in the country, with some of the biggest clusters in the New York City and Chicago areas, as well as inland California. Less-vulnerable markets remained spread mainly throughout the South and Midwest,” they wrote. “The 50 counties on the list included six in and around Chicago, five in the New York City metropolitan area, and 14 in areas of California mostly away from the Pacific coast. The rest were scattered around other parts of the country.”
Out of the 50 counties most exposed to potential market drops, 34 are found in those three top states, California, New Jersey, and Illinois. There are also large clusters in New York City and Chicago. Less vulnerable markets were spread across the South and Midwest.
The 22 of the 50 markets least likely to see a fall were in Virginia, Wisconsin, and Tennessee, as well as four each in Washington, D.C. and Richmond, VA.
“The patterns of varying market vulnerability that we’ve been seeing over the past few years are pretty much continuing in place, with some of the same areas falling out at opposite ends of the trend line,” Rob Barber, chief executive at ATTOM, said in prepared remarks. “Once again, this is not to suggest that any one market is facing imminent decline. It’s more a measure of vulnerability gaps. But with the housing market slowing down over the past year, some metro areas appear notably better positioned than others to withstand a scenario of the market topping out and heading downward.”
In 44 of the 50 most vulnerable counties, more than 0.1% of residential properties faced foreclosure in the first quarter of 2024. March 2024 unemployment was at least 5% in 30 of the top 50, compared to the national average of 3.8%.
