ATTOM Data Solutions' fourth-quarter 2020 Special Coronavirus Report revealed this week county-level housing markets around the United States that are more or less vulnerable to the impact of the virus pandemic. ATTOM Data Solutions reports pockets of the Northeast and other parts of the East Coast remained most at risk in the fourth quarter - with clusters in the New York City and Philadelphia, PA areas - while the West continued to be less vulnerable.
The report also reveals that New Jersey, Illinois, California, Louisiana, New York, Florida and Maryland had 40 of the 50 counties most vulnerable to the economic impact of the pandemic in the fourth quarter of 2020. They included eight suburban counties in the New York City metropolitan area, four around Philadelphia, PA, and two near Washington, D.C. Another six sat in the Chicago, IL, suburbs and two were in the St. Louis, MO area.
Five of the seven western counties in the top 50 during the fourth quarter were in northern California, while Illinois had eight of the nine midwestern counties among those most vulnerable. Outside of Florida and Maryland, the only southern state with more than two counties in the top 50 was Louisiana.
Fourth-quarter trends generally continued those found in the third quarter of 2020, but with different concentrations around several major metropolitan areas. The number of counties among the top 50 most at-risk was up from five to eight in the New York, NY, area and from three to six in the Chicago, IL, area, but down from four to two in the Washington, D.C., region and from four to one in the Baltimore, MD area.
Markets are considered more or less at risk based on the percentage of homes facing possible foreclosure, the portion with mortgage balances that exceed the estimated property value and the percentage of average local wages required to pay for major home ownership expenses.
The conclusions are drawn from an analysis of the most recent home affordability, equity and foreclosure reports prepared by ATTOM. Rankings were based on a combination of those three categories in 499 counties around the United States with sufficient data to analyze in the fourth quarter. Counties were ranked in each category, from lowest to highest, with the overall conclusion based on a combination of the three ranks. See below for the full methodology.
The findings come as the national housing market continues to withstand the effect of the virus pandemic while also remaining vulnerable to a fall. Home values shot up in 2020 by more than 10 percent in about three-quarters of the country, even as significant portions of the economy were shut down or idled, spiking unemployment. But amid a halting economic recovery, the ongoing market boom faces major questions connected to how long the pandemic will last, whether another recession looms and if a surge of buyers seen last year continues.
"Areas of the U.S. most at risk from damage connected to the Coronavirus pandemic spread out somewhat in the fourth quarter of 2020. But they still fell mainly along the East Coast, with significant pockets in certain areas, while other parts of the country seem to be less vulnerable," said Todd Teta, chief product officer with ATTOM Data Solutions. "This report is not a sign that any area actually took a fall in the fourth quarter. It's more a gauge of areas that may be more vulnerable if the market falters. In the coming months, much will depend on whether the country can halt the pandemic. We will continue to keep a close watch on home sales and prices to see how everything shakes out in 2021 and if changes hit different regions in different ways."
Most vulnerable counties clustered around New York City, Philadelphia and Chicago
Eighteen of the 50 U.S. counties most at-risk in the fourth quarter of 2020 from housing market troubles connected to the pandemic (from among the 499 counties with enough data to be included in the report) were in metropolitan statistical areas around New York, NY, Philadelphia, PA, and Chicago, IL.
They included eight in or near the New York City suburbs (Bergen, Essex, Ocean, Passaic and Sussex counties in New Jersey, along with Dutchess, Orange and Rockland counties in New York), and four around Philadelphia, PA (Burlington, Camden and Gloucester counties in New Jersey plus Delaware County, PA). The other six were in the Chicago, IL, suburbs (DuPage, Kane, Kendall, Lake, McHenry and Will counties). The New York and Chicago metropolitan areas saw increases from the third quarter of 2020 in the numbers of counties in the top 50 list.
While seven of Connecticut's eight counties made the top 50 list in the third quarter of 2020, just two did in the fourth quarter - Litchfield and Windham counties. The number of counties on the list in the Baltimore, MD, metro area also fell notably in the fourth quarter, from four to one (Carroll County) and dropped from four to two in the Washington, D.C, area (Charles County, MD, and Prince George's County, MD).
The only western counties among the top 50 most at risk from problems connected to the Coronavirus outbreak in the fourth quarter of 2020 were Butte County (Chico), CA; El Dorado County, CA (outside Sacramento); Humboldt County (Eureka), CA; Madera County, CA (outside Fresno); San Bernardino County, CA; Shasta County (Redding), CA; and Santa Fe County, NM.
Louisiana also had four counties in the top 50 during the fourth quarter - Caddo Parish (Shreveport), Livingston Parish (outside Baton Rouge), Orleans Parish (New Orleans) and Tangipahoa Parish (north of New Orleans). Florida had another three - Bay County (Panama City) Charlotte County (outside Fort Myers) and Flagler County (outside Daytona Beach).
Higher levels of unaffordable housing, underwater mortgages and foreclosure activity in most-at-risk counties
Major home ownership costs (mortgage payments, property taxes and insurance) consumed more than 30 percent of average local wages in 36 of the 50 counties that were most vulnerable to market problems connected to the virus pandemic in the fourth quarter of 2020. The highest percentages in those counties were in Rockland County (65 percent of average wages needed for major ownership costs); El Dorado County, CA, (outside Sacramento) (57.8 percent); Bergen County, NJ (outside New York City) (55.3 percent); Delaware County, PA (outside Philadelphia) (52 percent) and Beaufort County (Hilton Head), SC (51.7 percent). Nationwide, major expenses on the median-priced home typically consumed 29.6 percent of average wages.
At least 15 percent of mortgages were underwater in the third quarter of 2020 (the latest data available on owners owing more than their properties are worth) in 33 of the 50 most at-risk counties. Nationwide, 12.3 percent of mortgages fell into that category. Those with the highest underwater rates in those counties were Lowndes County (Valdosta), GA (36.8 percent of mortgages underwater); Hardin County, KY (outside Louisville) (32.8 percent); Cumberland County (Vineland), NJ (30.8 percent); Caddo Parish (Shreveport), LA (28.6 percent) and Atlantic County (Atlantic City), NJ (27.8 percent).
More than one in 2,500 residential properties faced a foreclosure action in the third quarter of 2020 (the latest available data) in 29 of the 50 most at-risk counties. Nationwide, one in 5,048 homes were in that position. (Foreclosure actions dropped about 80 percent last year amid a federal moratorium on banks taking back properties from homeowners behind on their mortgages during the virus pandemic.) Those with the highest rates in those counties were Hardin County, KY (outside Louisville) (one in 1,032 residential properties facing possible foreclosure); Onslow County (Jacksonville), NC (one in 1,090); Caddo Parish (Shreveport), LA (one in 1,361); Saint Clair County, IL (outside St. Louis, MO) (one in 1,409) and Livingston Parish, LA (outside Baton Rouge) (one in 1,562).
Counties least at-risk concentrated in Colorado, Massachusetts, Minnesota and Texas
Eighteen of the 50 counties least vulnerable to pandemic-related problems from among the 499 included in the fourth-quarter report were in Colorado, Massachusetts, Minnesota and Texas. They were concentrated in the Denver, Boston, Minneapolis, Houston and Dallas metro areas. The largest of the 50 least at-risk counties were Harris County (Houston), TX; King County (Seattle), WA; Clark County (Las Vegas), NV; Tarrant County (Fort Worth), TX and Middlesex County, MA (outside Boston).
Others among the 50 least at-risk counties with a population of at least 500,000 included Hennepin County (Minneapolis), MN; Suffolk County (Boston), MA; Essex County, MA (outside Boston); Norfolk County, MA (outside Boston) and Denver County, CO.
Lower levels of unaffordable housing, underwater mortgages and foreclosure activity in less vulnerable counties
Major home ownership costs (mortgage, property taxes and insurance) consumed less than 30 percent of average local wages in 33 of the 50 counties that were least at-risk from market problems connected to the virus pandemic in the fourth quarter of 2020. The lowest percentages in those counties were in Marion County (Indianapolis), IN (18.6 percent of average local wages required for major ownership costs); Benton County (Rogers), AR (19.6 percent); Potter County (Amarillo), TX (20.4 percent); Niagara County (Niagara Falls), NY (20.5 percent) and Macomb County, MI (outside Detroit) (20.6 percent).
More than 15 percent of mortgages were underwater in the third quarter of 2020 (with owners owing more than their properties are worth) in none of the 50 least at-risk counties. Those with the lowest rates in those counties were Chittenden County (Burlington), VT (3.5 percent); King County (Seattle), WA (4.8 percent); Washington County, OR (outside Portland) (4.8 percent); Marion County (Salem), OR (5.2 percent) and Boulder County, CO (5.2 percent).
More than one in 2,500 residential properties faced a foreclosure action in the third quarter of 2020 in none of the 50 least at-risk counties. Those with the lowest rates in those counties included Eau Claire County, WI (no residential properties facing possible foreclosure); Norfolk County, MA (outside Boston) (one in 277,275); Marion County (Salem) OR (one in 125,190); Clark County (Las Vegas), NV (one in 88,856); Suffolk County (Boston), MA (one in 83,310) and Middlesex County, MA (outside Boston) (one in 79,073).