Some California housing markets at risk of pandemic economic impactsFebruary 4, 2022
Several California housing markets are among the most vulnerable to economic impacts from the pandemic, according to a new study released Thursday that highlights the impact of COVID-19 on housing markets across the United States.
The report completed by Irvine-based research group ATTOM focused on property data, revealing that parts of California, Illinois and New York have the “highest concentrations” of counties at risk for pandemic-related economic impacts, according to fourth-quarter housing market data from 2021.
Out of the top 50 counties most vulnerable to pandemic economic impacts, 31 counties were located in New York, Illinois and California, the report said. The remaining 19 counties were primarily scattered along the East Coast.
Seven California counties were included in the top 50 list, including Butte, El Dorado, Humboldt, Shasta, Kern, Madera and Riverside Counties.
ATTOM determined markets to be more or less at risk based on the percentage of homes at risk of foreclosure, the number of mortgage balances that exceeded property value and the percentage of wages required to afford homeownership expenses for median-priced single-family dwellings.
The counties with housing markets most at-risk for economic downturn from the pandemic have “higher levels of unaffordable housing, underwater mortgages and foreclosures.” In 32 of the 50 counties most vulnerable to a market downturn, a median-priced single-family home accounted for more than 30% of average local wages in the fourth quarter of 2021, ATTOM found.
Multiple counties in California were among local markets with the highest percentage of wages going toward housing, including El Dorado County at 52.5% and Riverside County at 52%, according to ATTOM.
Conversely, county-level housing markets at lower risk of downtown from the pandemic had lower levels of unaffordable housing and foreclosure activity. In 35 of the 50 counties at least risk for market problems related to the pandemic, homeownership costs accounted for less than 30% of local wages on average.
“The U.S. housing market keeps powering on despite the Coronavirus pandemic that’s still raging across the country. Indeed, home prices keep rising in part because of the crisis,” Todd Teta, chief product officer with ATTOM, said in a statement. “Nevertheless, the virus remains a potent threat to the broader economy and the housing market, with some of the same counties we’ve seen in the past continuing to look vulnerable to potential downturns. No immediate warning signs hang over any one part of the country, but pockets are more vulnerable to the market taking a turn for the worse.”
Overall, market prices rose more than 10% in 2021, “both because of and in spite of the ongoing pandemic that slowed or idled major sectors of the economy in 2020,” the study found.
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