Washington and Sullivan are among the Tennessee’s counties with housing markets most vulnerable to the impact of the Coronavirus pandemic. But Tennessee’s most vulnerable doesn’t look as threatened as almost half of the other 406 counties that were part of an Attom Data Solutions study.

Attom based its rankings on an analysis of the number of homes facing possible foreclosure, the portion of homes with underwater mortgages, and the percentage of local wages required to pay for major homeownership expenses. Conclusions are drawn from an analysis of Attom’s most recent home affordability, home equity, and foreclosure reports.

Here’s the overall ranking of state counties in the analysis in order of the most at risk to the pandemic’s impact:

• Shelby – 227
• Washington – 232
• Sullivan – 282
• Williamson – 336
• Knox – 338
• Blount – 375
• Davidson – 393

WHY IS WASHINGTON MORE VULNERABLE?

An affordability decline is the primary driver of Washington Co.’s vulnerability. The most current affordability report showed the percentage of income to buy a median-priced home in that county was 28.8%.  That’s the third-highest income share among the seven state counties in the analysis. Williamson Co. has the highest share – 45.3% – followed by Davidson Co. 33%.

Washington Co.’s share of income to buy has been slowly moving toward the 30% mark when the share of a person’s income for housing stresses their overall income situation.  It has increased because the local market has been on a record-setting pace since 2016. During that period, home prices – and rents – have increased faster than wages.

Washington Co.’s affordability bottom line in Q2 was the average wage earner did not have the buying power to purchase a median-priced home in that market. That conclusion was based on annualized wages, the median price for existing housing, a 3% down payment, and a 28% debt-to-income ratio.

According to the Northeast Tennessee Association of Realtors’ (NETAR) Trends Report, the average sales price for a Washington Co. existing home during the first five months of this year was 5.5% higher than last year. The county has the highest average sales price among the 11 area counties monitored by NETAR.

WHY IS SULLIVAN LESS VULNERABLE?

Although affordability has also declined, housing in that county was more affordable in the Q2 Attom analysis. That report said the percentage of income to buy was 21.4%. That’s the second-lowest share of counties in the analysis. Shelby Co. has a lower share – 20.7%. Sullivan’s median price of $157,000 was also $48,000 less than it was in Washington Co.

NETAR’s May Trends report showed the five-month average price trend for Sullivan Co. was down 11.7% from the first five months of last year. Prices in that market have declined while the number of resales and market share has outperformed the other county markets for the past 17 months.

UNDERWATER AND FORECLOSURE FILINGS

There were 141 Sullivan and Washington Co. foreclosure filings factored into the risk analysis. Sullivan had the most – 85.

Another factor was the number of underwater properties – the mortgage was higher than the estimated value of the home. The two-county total was 51,990. Of that most – 26,853 – were in Washington Co.

Attom’s report reveals that a stretch of states running from Connecticut through Florida, plus Illinois, had 43 of the 50 counties most vulnerable to the economic impact of the pandemic. They included 11 suburban counties around New York City, seven in the Chicago, IL area, five around Washington, D.C., and four around Baltimore, MD. The only four western counties were in California, with none in other West Coast or southwestern states.

“Home-sales data from around the country is starting to show that eight years of price gains may be coming to an end amid the economic damage flowing from the virus pandemic. It’s still too early to make any definitive calls, but the latest numbers show storm clouds gathering over the market,” said Todd Teta, chief product officer. “With this second special report on the potential impact of the pandemic, we see pockets around the country that appear more or less poised to withstand downward pressure on prices and other market conditions. Over the next few months, enough data should come in to tell us how things will most likely pan out.”

LOCAL HOT MARKETS GET HOTTER

NETAR’s June Trends Report should be available in a week or so, and early indicators point to the local hot market is getting hotter. When the pandemic took its first bite out of home sales, housing economists and analysts predicted a sharp recovery would move the prime home buying and selling season from spring to summer and fall this year.

Categories: REAL ESTATE