THESE HOUSING MARKETS are most vulnerable to coronavirus impact

Most analysts agree that the housing market is one of the few sectors in the country that stands in relatively little peril from the coronavirus pandemic. However, according to a new report from ATTOM Data Solutions, that perspective could be flawed for certain high-risk markets around the country.

The report spotlighted county-level housing markets “more or less vulnerable to the impact of the Coronavirus pandemic,” explained ATTOM researchers. They concluded that the Northeastern United States has the largest concentration of the most at-risk counties, and the West and Midwest have the smallest concentration[1].

Risk Measured by Foreclosure, Negative Equity, and Housing Affordability

Analysts measured the degree of risk in a market by considering the percentage of housing units receiving a foreclosure notice in Q4 2019, the percentage of homes underwater in the market in Q4 2019, and the percentage of local wages homeowners needed in order to pay for “major homeownership expenses” in a median-priced home.

“What we’ve done is spotlight areas that appear to be more or less at risk based on several important factors,” said ATTOM’s chief product officer Todd Teta. “As we head into the Spring home-buying season, the next few months will reveal how severe the impact will be.”

Florida and New Jersey in Particular Peril

According to the analysis, the states of Florida and New Jersey contain just under half of the most vulnerable counties in the report. There are 14 counties in New Jersey considered “most vulnerable,” with five in the New York City suburban area. 10 counties in Florida are considered “most vulnerable, and all are located in the northern and central areas of the state.

Texas had one-fifth of the least-vulnerable counties in the nation (10 of 50), followed by Wisconsin (7) and Colorado (5). Three of the Texas counties were located in the Dallas-Fort Worth metro area, and there were another two in the Midland-Odessa area.

Risk is Evaluated in Different Ways

The ATTOM Data report follows an analysis by Redfin published last week that analyzed risk in different housing markets based on the number of people employed in the leisure and hospitality industry and the number of coronavirus cases per 1 million people as of March 24, 2020[2].

Redfin listed the markets most at risk as:

  1. Los Angeles, California (77.6 percent)
  2. Miami, Florida (76.8 percent)
  3. San Diego, California (75.2 percent)
  4. San Francisco, California (74.4 percent)
  5. Las Vegas, Nevada (73.9 percent)
  6. Denver, Colorado (69.4 percent)
  7. Chicago, Illinois (68.7 percent)
  8. Riverside, California (66.1 percent)
  9. New Orleans, Louisiana (64.7 percent)
  10. Providence, Rhode Island (63.7 percent)

How are you evaluating risk in your market? Do you agree with either set of results? Why or why not?

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[1] https://www.attomdata.com/news/market-trends/attom-data-solutions-special-report/

[2] https://www.businessinsider.com/housing-markets-most-at-risk-in-a-coronavirus-led-recession-2020-3#1-los-angeles-california-10

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