These 30 US cities may be on the verge of a coronavirus pandemic-driven housing crisis

These 30 US cities may be on the verge of a coronavirus pandemic-driven housing crisis

As the continued spread of COVID-19 puts much of the U.S. economy at a standstill, many are wondering how the economic slowdown will affect the real estate market. While construction is considered an essential business in the majority of states and real estate agents have transitioned to online showings, housing markets nationwide are likely to struggle, and some appear to be far more vulnerable than others.

Areas where housing costs are high relative to income and where recent spikes in demand may have created local housing price bubbles may be at a greater risk of a COVID-19-driven crisis, as would areas that were already struggling prior to the coronavirus outbreak.

Using data provided by ATTOM Data Solutions, a real estate analytics company, 24/7 Wall St. constructed an index composed of the change in median home sales price over the past decade, housing affordability, unemployment, industry vulnerability to the impact of COVID-19, and other measures of housing market health to identify the cities on the verge of a COVID-19-driven housing crisis.

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Many of the areas likely to be the hardest hit are those that were already at risk prior to the coronavirus pandemic. Factors such as the number of foreclosure filings, underwater mortgages, and distressed sales are good indicators of general housing market conditions and may become more important barometers in times of economic stress.

Housing markets with large shares of employment in sectors vulnerable to the current economic slowdown, such as oil and gas, tourism, and transportation, are also more likely to suffer during a COVID-19 recession. These are the places a COVID-19 recession will likely hit hardest.

Coronavirus has impacted different parts of the country to various degrees, and the cities with the highest number of COVID-19 cases span the country and vary in size. And because nearly all states are still undertesting for COVID-19, areas with more coronavirus cases per capita may have to take more precautions and continue to delay economic activity for longer, further handicapping the local housing market.

Akron, OH.

30. Akron, OH

• Chg. in median home sale price, Q1 2010 to Q1 2020: +36.9% ($92,738 to $126,950)

• Chg. in unemployment, Mar. 2019 to Mar. 2020: 4.2% to 5.3%

• Ratio of median home value to household income: 2.6x

• Pct. employment in industries at high risk from COVID-19: 12.8%

• COVID-19 cases as of May 12, 2020: 171.1 per 100,000

29. Sacramento–Roseville–Arden-Arcade, CA

• Chg. in median home sale price, Q1 2010 to Q1 2020: +102.6% ($195,000 to $395,000)

• Chg. in unemployment, Mar. 2019 to Mar. 2020: 3.8% to 4.5%

• Ratio of median home value to household income: 5.7x

• Pct. employment in industries at high risk from COVID-19: 15.8%

• COVID-19 cases as of May 12, 2020: 69.2 per 100,000

28. Phoenix-Mesa-Scottsdale, AZ

• Chg. in median home sale price, Q1 2010 to Q1 2020: +125.2% ($127,900 to $288,000)

• Chg. in unemployment, Mar. 2019 to Mar. 2020: 4.3% to 4.8%

• Ratio of median home value to household income: 4.1x

• Pct. employment in industries at high risk from COVID-19: 19.3%

• COVID-19 cases as of May 12, 2020: 146.7 per 100,000

27. Allentown-Bethlehem-Easton, PA-NJ

• Chg. in median home sale price, Q1 2010 to Q1 2020: +5.9% ($170,000 to $179,950)

• Chg. in unemployment, Mar. 2019 to Mar. 2020: 4.2% to 5.8%

• Ratio of median home value to household income: 3.3x

• Pct. employment in industries at high risk from COVID-19: 21.3%

• COVID-19 cases as of May 12, 2020: 844 per 100,000

26. Deltona-Daytona Beach-Ormond Beach, FL

• Chg. in median home sale price, Q1 2010 to Q1 2020: +87.2% ($107,900 to $202,000)

• Chg. in unemployment, Mar. 2019 to Mar. 2020: 3.7% to 5%

• Ratio of median home value to household income: 3.9x

• Pct. employment in industries at high risk from COVID-19: 17.9%

• COVID-19 cases as of May 12, 2020: 110.9 per 100,000

Jacksonville, FL.

25. Jacksonville, FL

• Chg. in median home sale price, Q1 2010 to Q1 2020: +74.9% ($120,050 to $210,000)

• Chg. in unemployment, Mar. 2019 to Mar. 2020: 3.4% to 4.4%

• Ratio of median home value to household income: 3.6x

• Pct. employment in industries at high risk from COVID-19: 19.9%

• COVID-19 cases as of May 12, 2020: 121.9 per 100,000

24. San Diego-Carlsbad, CA

• Chg. in median home sale price, Q1 2010 to Q1 2020: +84.1% ($315,000 to $580,000)

• Chg. in unemployment, Mar. 2019 to Mar. 2020: 3.4% to 4%

• Ratio of median home value to household income: 7.7x

• Pct. employment in industries at high risk from COVID-19: 17.8%

• COVID-19 cases as of May 12, 2020: 158.2 per 100,000

23. Atlanta-Sandy Springs-Roswell, GA

• Chg. in median home sale price, Q1 2010 to Q1 2020: +94.7% ($113,000 to $220,000)

• Chg. in unemployment, Mar. 2019 to Mar. 2020: 3.6% to 4.1%

• Ratio of median home value to household income: 3.4x

• Pct. employment in industries at high risk from COVID-19: 20.8%

• COVID-19 cases as of May 12, 2020: 296.6 per 100,000

22. Philadelphia-Camden-Wilmington, PA-NJ-DE-MD

• Chg. in median home sale price, Q1 2010 to Q1 2020: +11.1% ($180,000 to $200,000)

• Chg. in unemployment, Mar. 2019 to Mar. 2020: 3.9% to 5.2%

• Ratio of median home value to household income: 3.6x

• Pct. employment in industries at high risk from COVID-19: 13.2%

• COVID-19 cases as of May 12, 2020: 803.7 per 100,000

21. Memphis, TN-MS-AR

• Chg. in median home sale price, Q1 2010 to Q1 2020: +68.7% ($85,934 to $145,000)

• Chg. in unemployment, Mar. 2019 to Mar. 2020: 4.2% to 4.2%

• Ratio of median home value to household income: 3.1x

• Pct. employment in industries at high risk from COVID-19: 27%

• COVID-19 cases as of May 12, 2020: 345.1 per 100,000

New Haven-Milford, CT.

20. New Haven-Milford, CT

• Chg. in median home sale price, Q1 2010 to Q1 2020: +3.2% ($189,000 to $195,000)

• Chg. in unemployment, Mar. 2019 to Mar. 2020: 3.6% to 3.6%

• Ratio of median home value to household income: 3.7x

• Pct. employment in industries at high risk from COVID-19: 13.9%

• COVID-19 cases as of May 12, 2020: 1,097.4 per 100,000

19. Chicago-Naperville-Elgin, IL-IN-WI

• Chg. in median home sale price, Q1 2010 to Q1 2020: +36.8% ($161,500 to $221,000)

• Chg. in unemployment, Mar. 2019 to Mar. 2020: 4.1% to 4.8%

• Ratio of median home value to household income: 3.5x

• Pct. employment in industries at high risk from COVID-19: 15.7%

• COVID-19 cases as of May 12, 2020: 489.7 per 100,000

18. Providence-Warwick, RI-MA

• Chg. in median home sale price, Q1 2010 to Q1 2020: +35.8% ($199,900 to $271,500)

• Chg. in unemployment, Mar. 2019 to Mar. 2020: 3.6% to 4.8%

• Ratio of median home value to household income: 4.4x

• Pct. employment in industries at high risk from COVID-19: 14.2%

• COVID-19 cases as of May 12, 2020: 962 per 100,000

17. San Francisco-Oakland-Hayward, CA

• Chg. in median home sale price, Q1 2010 to Q1 2020: +115.8% ($380,000 to $820,000)

• Chg. in unemployment, Mar. 2019 to Mar. 2020: 2.8% to 3.3%

• Ratio of median home value to household income: 8.4x

• Pct. employment in industries at high risk from COVID-19: 16.7%

• COVID-19 cases as of May 12, 2020: 149.1 per 100,000

16. Denver-Aurora-Lakewood, CO

• Chg. in median home sale price, Q1 2010 to Q1 2020: +110.9% ($192,000 to $405,000)

• Chg. in unemployment, Mar. 2019 to Mar. 2020: 2.8% to 4.3%

• Ratio of median home value to household income: 5.3x

• Pct. employment in industries at high risk from COVID-19: 18.2%

• COVID-19 cases as of May 12, 2020: 436.4 per 100,000

Bridgeport-Stamford-Norwalk, CT.

15. Bridgeport-Stamford-Norwalk, CT

• Chg. in median home sale price, Q1 2010 to Q1 2020: -0.9% ($372,500 to $369,000)

• Chg. in unemployment, Mar. 2019 to Mar. 2020: 3.7% to 3.8%

• Ratio of median home value to household income: 4.8x

• Pct. employment in industries at high risk from COVID-19: 14.2%

• COVID-19 cases as of May 12, 2020: 1,428.3 per 100,000

14. Baton Rouge, LA

• Chg. in median home sale price, Q1 2010 to Q1 2020: +24.1% ($145,000 to $180,000)

• Chg. in unemployment, Mar. 2019 to Mar. 2020: 4% to 5.8%

• Ratio of median home value to household income: 3.3x

• Pct. employment in industries at high risk from COVID-19: 14.5%

• COVID-19 cases as of May 12, 2020: 561.9 per 100,000

13. Lakeland-Winter Haven, FL

• Chg. in median home sale price, Q1 2010 to Q1 2020: +114.4% ($90,000 to $193,000)

• Chg. in unemployment, Mar. 2019 to Mar. 2020: 4% to 5.1%

• Ratio of median home value to household income: 3.1x

• Pct. employment in industries at high risk from COVID-19: 20.5%

• COVID-19 cases as of May 12, 2020: 100.9 per 100,000

12. Fresno, CA

• Chg. in median home sale price, Q1 2010 to Q1 2020: +81.5% ($146,000 to $265,000)

• Chg. in unemployment, Mar. 2019 to Mar. 2020: 7.5% to 9.3%

• Ratio of median home value to household income: 5.2x

• Pct. employment in industries at high risk from COVID-19: 13.5%

• COVID-19 cases as of May 12, 2020: 100.6 per 100,000

11. Detroit-Warren-Dearborn, MI

• Chg. in median home sale price, Q1 2010 to Q1 2020: +158.3% ($60,000 to $155,000)

• Chg. in unemployment, Mar. 2019 to Mar. 2020: 4.5% to 4.9%

• Ratio of median home value to household income: 3x

• Pct. employment in industries at high risk from COVID-19: 12.8%

• COVID-19 cases as of May 12, 2020: 536.8 per 100,000

New York-Newark-Jersey City, NY-NJ-PA.

10. New York-Newark-Jersey City, NY-NJ-PA

• Chg. in median home sale price, Q1 2010 to Q1 2020: +20.6% ($340,000 to $410,000)

• Chg. in unemployment, Mar. 2019 to Mar. 2020: 3.8% to 3.6%

• Ratio of median home value to household income: 5.8x

• Pct. employment in industries at high risk from COVID-19: 12.3%

• COVID-19 cases as of May 12, 2020: 2,207 per 100,000

9. Cleveland-Elyria, OH

• Chg. in median home sale price, Q1 2010 to Q1 2020: +40.1% ($96,000 to $134,450)

• Chg. in unemployment, Mar. 2019 to Mar. 2020: 4.1% to 7%

• Ratio of median home value to household income: 2.8x

• Pct. employment in industries at high risk from COVID-19: 13.3%

• COVID-19 cases as of May 12, 2020: 197.4 per 100,000

8. Cape Coral-Fort Myers, FL

• Chg. in median home sale price, Q1 2010 to Q1 2020: +176.8% ($84,900 to $235,000)

• Chg. in unemployment, Mar. 2019 to Mar. 2020: 3.4% to 4.3%

• Ratio of median home value to household income: 4.2x

• Pct. employment in industries at high risk from COVID-19: 18.9%

• COVID-19 cases as of May 12, 2020: 183.1 per 100,000

7. Riverside-San Bernardino-Ontario, CA

• Chg. in median home sale price, Q1 2010 to Q1 2020: +120.6% ($170,000 to $375,000)

• Chg. in unemployment, Mar. 2019 to Mar. 2020: 4.2% to 5%

• Ratio of median home value to household income: 5.5x

• Pct. employment in industries at high risk from COVID-19: 22.8%

• COVID-19 cases as of May 12, 2020: 184.3 per 100,000

6. Orlando-Kissimmee-Sanford, FL

• Chg. in median home sale price, Q1 2010 to Q1 2020: +139% ($102,500 to $245,000)

• Chg. in unemployment, Mar. 2019 to Mar. 2020: 3.2% to 4.2%

• Ratio of median home value to household income: 4.1x

• Pct. employment in industries at high risk from COVID-19: 28.1%

• COVID-19 cases as of May 12, 2020: 113.5 per 100,000

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Miami-Fort Lauderdale-West Palm Beach, FL.

5. Miami-Fort Lauderdale-West Palm Beach, FL

• Chg. in median home sale price, Q1 2010 to Q1 2020: +120.6% ($125,050 to $275,900)

• Chg. in unemployment, Mar. 2019 to Mar. 2020: 3.1% to 4.1%

• Ratio of median home value to household income: 5.3x

• Pct. employment in industries at high risk from COVID-19: 19.6%

• COVID-19 cases as of May 12, 2020: 402.7 per 100,000

4. Los Angeles-Long Beach-Anaheim, CA

• Chg. in median home sale price, Q1 2010 to Q1 2020: +87.7% ($350,000 to $657,000)

• Chg. in unemployment, Mar. 2019 to Mar. 2020: 4.2% to 5.7%

• Ratio of median home value to household income: 9x

• Pct. employment in industries at high risk from COVID-19: 19%

• COVID-19 cases as of May 12, 2020: 278.1 per 100,000

3. Bakersfield, CA

• Chg. in median home sale price, Q1 2010 to Q1 2020: +95.7% ($116,500 to $228,000)

• Chg. in unemployment, Mar. 2019 to Mar. 2020: 7.9% to 10.2%

• Ratio of median home value to household income: 4.4x

• Pct. employment in industries at high risk from COVID-19: 16%

• COVID-19 cases as of May 12, 2020: 150.7 per 100,000

2. New Orleans-Metairie, LA

• Chg. in median home sale price, Q1 2010 to Q1 2020: +43.8% ($142,584 to $205,000)

• Chg. in unemployment, Mar. 2019 to Mar. 2020: 4.2% to 6%

• Ratio of median home value to household income: 4.1x

• Pct. employment in industries at high risk from COVID-19: 22.2%

• COVID-19 cases as of May 12, 2020: 1,372.7 per 100,000

Las Vegas-Henderson-Paradise, NV.

1. Las Vegas-Henderson-Paradise, NV

• Chg. in median home sale price, Q1 2010 to Q1 2020: +135.8% ($120,000 to $283,000)

• Chg. in unemployment, Mar. 2019 to Mar. 2020: 4.2% to 6.8%

• Ratio of median home value to household income: 5x

• Pct. employment in industries at high risk from COVID-19: 35.4%

• COVID-19 cases as of May 12, 2020: 227.4 per 100,000

Methodology

To determine the cities on the verge of a COVID-19-driven housing crisis, 24/7 Wall St. constructed an index composed of the change in median home sales price, housing affordability, unemployment, industry risk analysis, and other measures of housing market health.

Data on the change in median home sale price from Q1 2010 to Q1 2020 came from ATTOM Data Solutions and was included in the index at full weight. Data on the number of distressed sales – which includes real estate-owned sales, short sales, and foreclosure auction homes sold to third-party buyers – as a percentage of all sales in Q1 2020, also from ATTOM, were included at half weight. Data on the number of “seriously underwater” mortgages as a percentage of all outstanding mortgages in Q1 2020, and the number of foreclosure filings as a percentage of all housing units in Q1 2020, both from ATTOM, were included in the index at half weight.

Data on the unemployment rate, seasonally adjusted for March 2020, came from the Bureau of Labor Statistics and was included in the index at half weight. The percentage-point change in unemployment from March 2019 to March 2020 was included in the index at full weight. We calculated the ratio of median home value to median household income using data from the U.S. Census Bureau’s 2018 American Community Survey (ACS) as a proxy for housing affordability and included it in the index at full weight.

Data on the percentage of employment in high-risk industries was calculated using data from the BLS 2018 Quarterly Census of Employment and Wages and COVID-19 industry risk analysis from the March 2020 paper, “COVID-19: A Fiscal Stimulus Plan,” published by Moody’s Analytics, an economic research firm. Finally, data on the number of confirmed COVID-19 cases as of May 12, 2020, gathered from state and local health departments were aggregated from the county to the metropolitan level, adjusted for population using five-year data from the 2018 ACS, and were included in the index at full weight.

24/7 Wall Street is a USA TODAY content partner offering financial news and commentary. Its content is produced independently of USA TODAY.

Source: https://www.usatoday.com/story/money/2020/05/20/cities-on-the-verge-of-a-covid-driven-housing-crisis/111782790/

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