The Chicago skyline and downward facing arrows

3 regions top the list of markets most at risk for a slowdown  

ATTOM researchers found that counties around Chicago and NYC, as well as several in inland California, would be the most vulnerable in a housing downturn.

June 17, 2024
3 minutes

While the Midwest and Northeast housing markets have been largely resilient in the last year, counties in the Chicago and New York metro areas — as well as a large swath of northern and central California — could be most at risk of a housing slowdown, according to new research from ATTOM

Where housing markets are vulnerable: After reviewing market conditions in 590 counties across the country, ATTOM researchers determined that half of the top 50 most vulnerable counties were concentrated in three regions: the Chicago area, with six at-risk counties; the New York City metro, with five; and non-coastal areas of California, with 14. 

While Cook County — which includes Chicago proper and inner ring suburbs — was not considered a high-risk area, five surrounding counties in Illinois, and Lake County in Indiana's northwestern tip, were among the most vulnerable counties analyzed.

In the New York City metro, four New Jersey counties made the list, as well as one county within the city limits: Kings County, which encompasses trendy Brooklyn. 

California had the largest number of at-risk counties, many of which were concentrated around Sacramento and Fresno in the northern and central parts of the state.

Why these markets are at risk of a slowdown: To determine which counties were most vulnerable to a housing downturn, ATTOM looked at multiple variables including foreclosure risk, areas with higher levels of underwater mortgages and higher unemployment rates, and affordability challenges. 

In 36 of the 50 most vulnerable counties, major homeownership costs — mortgage payments, property taxes and insurance — ate up more than a third of the typical area wage. Brooklyn was a standout, with a whopping 109.5% of the average local wage needed to cover homeownership expenses, while several California counties required owners to shell out more than 50% of their wages.

What the experts said: "The patterns of varying market vulnerability that we've been seeing over the past few years are pretty much continuing in place, with some of the same areas falling out at opposite ends of the trend line," said Rob Barber, ATTOM's CEO. "This is not to suggest that any one market is facing imminent decline — it's more a measure of vulnerability gaps."

Barber also noted that some regions are relatively well protected: "With the housing market slowing down over the past year, some metro areas appear notably better positioned than others to withstand a scenario of the market topping out and heading downward."

The least vulnerable areas: While a handful of Illinois counties were considered most at risk of a slowdown, ATTOM researchers said the Midwest remained strong overall — particularly Wisconsin, with seven of the least-vulnerable counties.

Virginia was home to nine of the least-vulnerable counties — more than any other state — while Tennessee had six. 

Out of the top 50 counties that were least at-risk of a slowdown, 24 were in the South, 19 were in the Midwest, four were in the Northeast and just three were in the West.

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