The Riskiest Housing Markets, Where Home Prices Could Fall the Most
Category : Uncategorized
The Riskiest Housing Markets, Where Home Prices Could Fall the Most By Clare Trapasso
Sep 15, 2022
With the housing market correction well underway, the big question on the minds of just about everyone is if home prices are poised to fall. Mortgage rates are rising, fears are mounting that the nation will slip into a recession, and inflation continues to soar.
Something has to give, right?
However, when it comes to real estate, it’s all about location. New Jersey, Illinois, and inland California had the most at-risk real estate markets if the nation slips into an economic downturn, according to real estate data firm ATTOM. New York City and Chicago were particularly susceptible.
Keep up with key real estate trends
Sign up now
Meanwhile, the South and Midwest were the least vulnerable.
“Most of the markets that are most at risk tend to have higher unemployment and tend to be the least affordable markets,” says Rick Sharga, executive vice president of market intelligence at ATTOM. “We’re not suggesting any of these metros is in imminent danger of a housing crash. In the event of a recession, these metro areas would be the most likely to have some fallout.”
To come up with the list, ATTOM assessed the vulnerability of 575 U.S. counties by looking at the percentage of homes facing a potential foreclosure; the share of homes with mortgage balances that were higher than property values; local unemployment; and the percentage of average local wages needed to afford homeownership expenses. Counties had to have enough data to analyze.
The analysis assumes that the Federal Reserve’s determination to continue raising rates to combat inflation, along with other worrying economic factors, will push the nation into a recession. If that happens, some parts of the country are likely to fare better and worse than others, similar to what was experienced during the Great Recession.
Nearly two-thirds of the 50 most at-risk counties were in the Chicago, New York City, and Philadelphia metropolitan areas and in inland California. (Metros include the main city and surrounding towns, suburbs, and smaller urban areas.)
“When you look at the top 10 to 15 most vulnerable markets, they tend to be in places like the New York metro and the Chicago metro, where you have limited affordability and relatively high unemployment,” says Sharga.
On the other hand, at least half of the 50 least vulnerable markets were in the South and 14 were located in the Midwest. Tennessee, Wisconsin, and Arkansas had the most markets that were deemed safer.
“In the South, homes are less expensive,” says Sharga. “And many of the people moving into the South have been moving out of high-priced, high-taxed states and looking for more affordable properties [to help buffer these markets]. They have very, very strong employment as well.”
#Silver Lake Realtor #Los Feliz Realtor