East Coast, Chicago Will Face Steepest Housing Recovery Post-COVID
The pandemic still looms large and may pose a threat to the progress made so far, and by extension could affect home sales and prices.
States across the East Coast, as well as the greater Chicago area, will face the biggest hurdles to housing recovery as the COVID-19 pandemic wanes, according to a new report by ATTOM Data Solutions.
In a first quarter retrospective released this week, the property database firm noted that New York City, Chicago, and parts of South Florida contain the largest clusters of high-risk counties where a post-COVID recovery will be steepest. Conversely, regions across the American West (with the exception of the Northern California counties of Butte, Humboldt, and Shasta) are best positioned to recover swiftly.
Florida, Illinois, New Jersey, Connecticut and North Carolina accounted for 33 of the 50 counties most vulnerable to the economic impact of the pandemic in the first quarter of this year, including seven suburban counties near Chicago, four near New York City, five in southern Florida and two around Hartford, Connecticut.
ATTOM evaluated the markets’ risk metrics based on the percentage of homes facing possible foreclosure, those with mortgage balances exceeding the estimated property value and the percentage of average local wages required to pay for major home ownership expenses, the report states.
“Clearly, the housing market continues to surge, and things are looking up, more and more, for the US economy in 2021, after a year of major setbacks in many sectors. But the pandemic still looms large and may pose a threat to the progress made so far, and by extension could affect home sales and prices,” said Todd Teta, chief product officer with ATTOM Data Solutions.
“Our analysis suggests that even as the market remains hot, pockets of the East Coast, Midwest and South are at higher risk from potential damage connected to the pandemic. We will stay on top of this as the crucial months ahead should reveal whether the country can leave this crisis behind.”
The most at-risk counties tended to have higher concentrations of unaffordable housing, underwater mortgages, and foreclosure activity, as well as major homeownership costs that exceeded more than 30% of take-home pay.
About 15% of mortgages were underwater in Q4 in 32 of the 50 most at-risk counties, as opposed to 11.2% nationwide. Topping the list were Kankakee County, Ill., with 38.4% of mortgages underwater; Escambia County (Pensacola), Fla. (31%); Caddo Parish (Shreveport), LA (27.7%); Tazewell County (outside Peoria), IL (27.5%) and Tangipahoa Parish, LA (north of New Orleans) (25.6%). And in 36 of the 50 most troubled counties, more than one in 2,500 homes were facing foreclosure in Q1, as opposed to one in 4,078 nationally.
The least at-risk counties were in Colorado, Minnesota, Wisconsin and Texas.
Others among the top-50 least at-risk counties with a population of 500,000 or more included Harris County (Houston), TX; King County (Seattle), WA; Mecklenburg County (Charlotte), NC; Wake County (Raleigh), NC and Erie County (Buffalo), NY, the report said