California, New Jersey counties among those at highest risk of housing market issues

Attom ranked counties based on foreclosures, unaffordability, unemployment

A county-level look at residential downturn risk by Attom revealed that California, New Jersey and Illinois had the largest concentrations of markets vulnerable to a housing market slowdown.

The study ranked counties nationwide based on several factors, including the share of homes with a foreclosure filing; the percentage of local wages needed to afford major homeownership expenses; the share of properties with underwater mortgages; and area unemployment rates. Attom used first-quarter data, including March unemployment figures, to compile its ranking.

The three aforementioned states had 34 of the 50 counties across the country considered most exposed to risk. Included among those are six counties in and around metro Chicago: De Kalb, Kane, Kendall, McHenry and Will counties in Illinois, along with Lake County in neighboring Indiana. Another five are clustered around New York City, including Kings County, which is coextensive with Brooklyn, plus another four in the New Jersey suburbs: Essex, Passaic, Sussex and Union.

Fourteen are in inland California, including some counties in and around Sacramento (El Dorado, Solano and Yolo counties), Fresno (Fresno, Kings, Madera and Tulare counties) and the Inland Empire (San Bernardino County).

It’s worth noting that while the 50 most vulnerable counties identified by Attom generally shared some prevalence of risk factors, different geographies were most precarious in different ways. Counties in California and around New York City, for example, suffered in Attom’s ranking because of the high costs of homeownership in the notoriously pricey states. In Kings County, for example, a whopping 109.5% of average local wages were needed for major homeownership costs in the first quarter. In El Dorado County, that figure was at a still-high 64%; in Passaic County, it was 62.1%.

Inland California also dubiously earned high-risk status because of high unemployment. The highest rates in the 50 most at-risk counties were clustered in Central California, with Tulare, Merced, Kern and Kings counties all sporting jobless rates of at least 10%. The March unemployment rate nationwide, for comparison, stood at just 3.8%.

Notably, more than one out of every 1,000 homes faced a foreclosure action in 44 of the 50 most vulnerable counties during the first quarter. Compare that to the nation at large, where one out of every 1,478 were in the same position.

In contrast, most of the 50 counties deemed by Attom as least vulnerable to housing market issues were strewn through less expensive areas. Twenty-four were in the South, with another 19 in the Midwest. Counties in pricier areas were also present, though just four were in the Northeast and three were in the West.


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