3 Regions Top the List of Markets Most at Risk for a Slowdown

New research from ATTOM reveals that counties around Chicago, New York City, and several in inland California are most vulnerable to a housing slowdown.

Vulnerable Housing Markets

While the Midwest and Northeast housing markets have shown resilience over the past year, ATTOM’s review of 590 counties identified specific areas that could be most at risk in a housing downturn. The research highlighted three primary regions of concern: the Chicago area, the New York metro area, and non-coastal regions of California.

Key Findings:

Chicago Area: Cook County, encompassing Chicago, is not considered high-risk. However, five surrounding Illinois counties and Lake County in Indiana are deemed vulnerable.

New York Metro: Four New Jersey counties and Kings County (Brooklyn) in New York City are identified as high-risk.

California: The state has the highest number of at-risk counties, particularly around Sacramento and Fresno in the northern and central parts of the state.

Risk Factors

To determine vulnerability, ATTOM examined factors such as foreclosure risk, levels of underwater mortgages, unemployment rates, and affordability challenges. In 36 of the top 50 vulnerable counties, homeownership costs (including mortgage payments, property taxes, and insurance) consumed more than a third of the average local wage.

Notably, in Brooklyn, homeownership costs are a staggering 109.5% of the local wage, and in several California counties, these costs exceed 50%.

Expert Insights

Rob Barber, CEO of ATTOM, explained that the patterns of market vulnerability have been consistent over recent years, with certain areas consistently falling at opposite ends of the trend line.

This analysis does not suggest an imminent decline in any one market but highlights where vulnerability gaps exist. Barber also noted that some regions are relatively well protected against downturns.

Despite the overall market slowdown over the past year, certain metro areas appear to be in a stronger position to withstand potential economic challenges.

Least Vulnerable Areas

While certain Illinois counties are considered at risk, the Midwest overall remains strong. Wisconsin, in particular, has seven of the least vulnerable counties.

Virginia stands out with nine counties among the least vulnerable, more than any other state, while Tennessee has six. Of the top 50 counties least at risk of a slowdown, 24 are in the South, 19 are in the Midwest, four are in the Northeast, and three are in the West.

Conclusion

This analysis from ATTOM provides valuable insights into which housing markets may face challenges and which are better positioned to handle economic fluctuations.

Understanding these patterns can help homeowners, investors, and policymakers navigate the complexities of the housing market. By identifying regions that are more or less vulnerable, stakeholders can make informed decisions and potentially mitigate the impact of any future downturns.

Whether you’re considering buying, selling, or investing in real estate, staying informed about these trends is crucial for making sound financial choices.