Real Estate Markets In The South Rank As More Stable Than Other Parts Of The Country
Understanding the Stability and Vulnerability of U.S. Housing Markets
In a climate of significant uncertainty within the real estate landscape, ATTOM's Special Housing Impact Report for Q2 2023 provides essential insights, spotlighting county-level housing markets around the United States and evaluating their respective stability or vulnerability to a potential decline. The study particularly focuses on factors such as home affordability, foreclosures, and unemployment rates, offering a comprehensive overview of the areas more or less exposed to market risks.
Most Vulnerable Areas
New Jersey and Illinois emerged as states with the highest concentration of vulnerable markets, predominantly clustering around the New York City, Chicago, and Philadelphia areas. The report reveals that these two states accounted for 23 of the 50 counties that are most vulnerable to potential drops, based on ATTOM’s research methodology. Other vulnerable counties included eight around New York City, six in the Chicago metropolitan area, and three near Philadelphia, along with several others scattered through California, Indiana, and along parts of the East Coast.
Most Stable Areas
On the other hand, the Southern region of the United States showcased the most robust level of stability, with the highest concentration of markets least at risk of decline. In fact, 18 of the 51 counties tied with the most favorable rankings were in the South. These counties exhibited the lowest levels of underwater mortgages, foreclosure activity, and unemployment, which is indicative of a stronger, more stable housing market.
Foreclosure and Unemployment Insights
The most vulnerable counties presented higher levels of underwater mortgages, foreclosures, and unemployment. In the second quarter of 2023, 37 of the 50 worst-ranked counties had at least 5% of residential mortgages underwater, with homeowners owing more than the estimated value of their properties.
Foreclosure actions were also more prominent in these regions, with one of every 1,000 residential properties facing possible foreclosure.
Unemployment was also notably higher in these areas. For instance, Madera County, CA, recorded a high 7.7% unemployment rate in June 2023. On the other hand, Merrimack County, NH, among the least at-risk counties, posted a low 1.6% unemployment rate.
Is a Real Estate Crash Imminent?
Rob Barber, CEO at ATTOM, noted the disparities in the risks, highlighting pockets of the U.S. housing market with shakier foundations. However, he emphasized that these findings do not forecast an imminent crash, but rather indicate areas to watch, especially if the market turns downward. “As with earlier reports, it doesn't mean any one area or cluster of areas is about to crash,” Barber said. “The overall market and the economy remain way too strong for imminent warnings to be sounded. But there are weak spots that are still popping up as areas to watch, especially if the market turns back downward.”
While the U.S. housing market continues its recovery following a brief downturn, it’s important to note that prices currently sit at all-time highs nationally, with strong economic fundamentals keeping supply low while demand remains strong. It’s also imperative to remember that each local real estate market is unique, and even if some parts of the Country experience a downturn, other hosing markets are likely to continue thriving. The ATTOM Special Housing Impact Report offers valuable data, helping buyers, sellers, and real estate professionals alike navigate the intricacies of the real estate market.
About ATTOM Data
ATTOM stands at the forefront of providing premium property data, fueling various industries with essential insights for innovation, transparency, and efficiency in a data-driven economy. Covering over 155 million U.S. residential and commercial properties, ATTOM's robust data management process guarantees enhanced, standardized, and validated real estate data for optimized industry applications.