ATTOM Data Solutions, curator of the nation’s premier property database, today released its first-quarter 2021 Special Coronavirus Report spotlighting county-level housing markets around the United States that are more or less vulnerable to the impact of the Coronavirus pandemic that continues to impact the U.S. economy. The report shows that states along the East Coast, as well as Illinois, were most at risk in the first quarter of 2021 – with clusters in the New York City, Chicago and southern Florida areas – while the West continued to face less risk.
The report reveals that Florida, Illinois, New Jersey, Connecticut and North Carolina had 33 of the 50 counties most vulnerable to the economic impact of the pandemic in the first quarter of 2021. They included seven suburban counties in the Chicago metropolitan area, four near New York City, five in southern Florida and two around Hartford, CT.
The only three western counties in the top 50 during the first quarter of 2021 were in northern California, while the only southern state outside of the East Coast with more than two counties in that group was Louisiana.
First-quarter trends generally continued those found in 2020, but with smaller concentrations around several major metropolitan areas. The number of counties among the top 50 most at-risk was down in the New York, NY; Philadelphia, PA and Washington, D.C. metro areas.
Markets were considered more or less at risk based on the percentage of homes facing possible foreclosure, the portion with mortgage balances that exceeded 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 552 counties around the United States with sufficient data to analyze in the first quarter of 2021. 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 follow one of the housing market’s strongest years in the past decade, when the median single-family home price rose more than 10 percent across much of the nation. They also come at a time of increased financial optimism, with retail sales up in 2021, new unemployment claims down and a second round of federal government stimulus money coursing through the economy. But the pandemic remains a threat to the economy as new virus variants emerge, and additional clusters of new cases crop up in various parts of the country.
“Clearly, the housing market continues to surge, and things are looking up, more and more, for the U.S. 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.”
Most vulnerable counties clustered around New York City, Chicago and southern Florida
Seventeen of the 50 U.S. counties most vulnerable in the first quarter of 2021 to housing market troubles connected to the pandemic (from among the 552 counties with enough data to be included in the report) were in the areas around New York, NY, and Chicago, IL, as well in southern Florida.
They included seven in the Chicago metro area (De Kalb, Du Page, Kane, Kendall, Lake, McHenry and Will counties) and four in the New York City metro area (Essex, Middlesex, Ocean and Sussex counties in New Jersey). The five in southern Florida were Charlotte County (Punta Gorda), Highlands County (Sebring), Indian River (Vero Beach), Manatee County (Bradenton) and Saint Lucie County (Port St. Lucie).
Florida also had another six counties in the top 50 spread across the state: Bay County (Panama City), Clay County (Jacksonville), Escambia County (Pensacola), Flagler County (Daytona Beach), Lake County (Orlando) and Osceola County (Orlando).
New Jersey also had another two in the top 50, Atlantic County (Atlantic City) and Cumberland County (Vineland), and Illinois had one more, Tazewell County (Peoria).
In addition, Louisiana had five counties in the top 50 during the first quarter – Saint Tammany and Tangipahoa parishes, both north of New Orleans, plus Ascension and Livingston parishes, both outside Baton Rouge, and Caddo Parish (Shreveport).
The only western counties among the top 50 most at risk from problems connected to the Coronavirus outbreak in the first quarter of 2021 were Butte County (Chico), CA; Humboldt County (Eureka), CA and Shasta County (Redding), CA.
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 25 of the 50 counties that were most vulnerable to market problems connected to the virus pandemic in the first quarter of 2021. The highest percentages in those counties were in Beaufort County (Hilton Head), SC (43.6 percent of average wages needed for major ownership costs); Sussex County, NJ (40.6 percent); Manatee County (Bradenton), FL (39.9 percent); Kendall County, IL (outside Chicago) (39.7 percent) and Ocean County, NJ (New York City) (39.6 percent).
At least 15 percent of mortgages were underwater in the fourth quarter of 2020 (the latest data available on owners owing more than their properties are worth) in 32 of the 50 most at-risk counties. Nationwide, 11.2 percent of mortgages fell into that category. Those with the highest underwater rates among the 50 most at-risk counties were Kankakee County, IL (outside Chicago) (38.4 percent of mortgages underwater); Escambia County (Pensacola), FL (31 percent); Caddo Parish (Shreveport), LA (27.7 percent); Tazewell County (outside Peoria), IL (27.5 percent) and Tangipahoa Parish, LA (north of New Orleans) (25.6 percent).
More than one in 2,500 residential properties faced a foreclosure action in the first quarter of 2021 in 36 of the 50 most at-risk counties. Nationwide, one in 4,078 homes were in that position. (Foreclosure actions have dropped about 80 percent over the past year amid a federal moratorium on banks taking back properties from homeowners behind on their mortgages during the virus pandemic). Those with the highest foreclosure rates among those counties were Highlands County (Sebring), FL (one in 282 residential properties facing possible foreclosure); Kankakee County, IL (outside Chicago) (one in 310); Caddo Parish (Shreveport), LA (one in 1,011); Indian River County (Vero Beach), FL (one in 1,040) and Kent County (Dover), DE (one in 1,281).
Counties least at-risk concentrated in Colorado, Minnesota, Wisconsin and Texas
Twenty-two of the 50 counties least vulnerable to pandemic-related problems from among the 552 included in the first-quarter report were in Colorado, Minnesota, Wisconsin and Texas. Ten of them were in the Denver, CO; Dallas, TX, and Minneapolis, MN, metro areas, including Hennepin County (Minneapolis), MN; Dallas County, TX; Tarrant County (Fort Worth), TX; Denver County, CO, and Arapahoe County (Aurora), CO.
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.
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 43 of the 50 counties that were least at-risk from market problems connected to the virus pandemic in the first quarter of 2021. The lowest percentages among those counties were in Madison County (Huntsville), AL (14.2 percent of average local wages required for major ownership costs); Sheboygan County, WI (16.1 percent); Muskegon County, MI (16.6 percent); Macomb County, MI (outside Detroit) (16.7 percent) and Richmond City/County, VA (16.9 percent).
More than 15 percent of mortgages were underwater in the fourth 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 (3.3 percent); Multnomah County (Portland), OR (4.4 percent); King County (Seattle), WA (4.5 percent); Marion County (Salem), OR (4.5 percent) and Washington County, OR (outside Portland) (4.6 percent).
More than one in 2,500 residential properties faced a foreclosure action in the first quarter of 2021 in none of the 50 least at-risk counties. Those with the lowest rates in those counties included Wichita County (Wichita Falls), TX (no residential properties facing possible foreclosure); Pueblo County, CO (outside Colorado Springs) (one in 71,223); Chittenden County (Burlington), VT (one in 69,734); Olmstead County (Rochester), MN (one in 65,380) and Marion County (Salem), OR (one in 63,105).
Report methodology
The ATTOM Data Solutions Special Coronavirus Market Impact Report is based on ATTOM’s first-quarter 2021 residential foreclosure and home affordability reports and fourth-quarter 2020 underwater property report. (Press releases for those reports show the methodology for each.) Counties with sufficient data to analyze were ranked based on the percentage of residential properties with a foreclosure filing during the first quarter of 2021, the percentage of average local wages need to afford the major expenses of owning a median-priced home in the first quarter of 2021 and the percentage of properties with outstanding mortgage balances that exceeded their estimated market values in the fourth quarter of 2020. Ranks then were added up to develop a composite ranking across all three categories. Equal weight was given to each category. Counties with the lowest composite rank were considered most vulnerable to housing market problems. Those with the highest composite rank were considered least vulnerable.
