Which Housing Markets Are Most at Risk From COVID-19



In less than two months, the coronavirus and subsequent lockdowns have dramatically impacted the housing market across the U.S. – even after many real estate agents pivoted to online showings. 

picture of virus

Based on a recent analysis of more than 480 counties by ATTOM Data Solutions, many of those who are at the highest risk due to the pandemic is in New Jersey and Florida. While there are many reasons for this, the fact is that these counties are home to some of the most expensive properties in the country and this could mean that homeowners in these areas could risk a double whammy as their virus could impact their health and their home values at the same time.

One thing that ties together many of the “at-risk” counties is that they generally are home to older populations – many of which might have or be interested in a reverse mortgage. This is important as many older homeowners are either expecting to tap into their home equity to finance their retirement or want to use this mortgage product to freeze their mortgage payments.

While many reverse mortgage lenders remain financially stable, falling housing prices could have an impact on the economics of a reverse mortgage. As such, many analysts are advising would-be borrowers to finalize these loans before housing prices fall and instead of getting a line of credit, to take the lump sum option as this would lock in the equity available from the loan.

Beyond this, the markets that are at risk are a mixed bag. For owners, it could mean that they will need to put off a planned move, or risk getting less for their home today than they could six months ago.  For buyers, the combination of falling home prices and low-interest rates could help many to get the home of their dreams.


With everything related to real estate location matters, and the markets which at most at risk from the COVID crisis are those where the average homeowners have the least amount of equity in their homes as a percentage of the overall value.

In New Jersey, this includes homes in Sussex, Warren, Atlantic, Passaic, Ocean, Gloucester, and Essex counties. If this seems like it is most of the state, that is because it is. In Florida, the most at-risk county is Flagler, which is just north of Daytona Beach.  Other at-risk counties include Charles County, Maryland, McHenry County, Illinois, Monroe, and Spotsylvania counties in Pennsylvania, and Sussex County, Delaware.

Many of the homes in these areas are already underwater (in that the mortgages are more than the home values), and this could become a disaster if homeowners begin to rush to sell their homes in this environment – especially as more than 36 million Americans have already lost their jobs.

Another worrying aspect is that many of the counties listed are also on the list of the most expensive placed to buy a home. The research found that of the counties the most at risk, Monroe County, Pennsylvania, where the median-priced home requires 31 percent of a homebuyer’s income to buy a home.  Compare this to Rockland County, New York, where the median-priced home requires more than 66 percent of a homebuyer’s income. 

Granted, the statistics are somewhat skewed by high-end homes in these areas, but the overall trend is worrying. This is especially true in the suburbs of New York City, as would-be homeowners find themselves spending well over 40 percent of their monthly income on their mortgages. How does this happen? For starters, many of the mortgages in these areas are jumbo loans. As such, the underwriting requirements from banks are slightly different from conventional loans.

If this doesn’t sound the alarm, the fact the New York Metro area has been one of the hardest hit – according to reported numbers – cities in the world with roughly 400,00 confirmed cases in the past two months alone. 

Add to this the continued lockdowns in New York and New Jersey, and many analysts are concerned whether homeowners can continue to make their mortgage and coming property tax payments in June. Nationally, it is estimated that nearly one-third of Americans didn’t pay their rent or mortgage in May, and it is only a matter of time before this will lead to a wave of defaults.

What does this mean for the housing market? The answer largely depends on what markets you are considering. In markets such as the New York Metro area or the Atlantic Coast of Florida, already soft markets might get significantly worse.

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