Sullivan, Washington at low risk of home price declines


TRI-CITIES, Tenn. – Risk is a top concern at the family dinner table, city halls, and small business offices these days. Between a volatile stock market, a stubborn inflation rate, and persistent rumors the housing market’s happy days are about to end there’s plenty to test consumer confidence. That makes looking at some of the data-driven reports that rise above the media’s noise level so important.

ATTOM Data Solution’s current Special Housing Risk Report is one of them. ATTOM isn’t a political think tank or action group’s propaganda arm cranking out clickbait. It’s one of the nation’s leading real estate data curators. Its second quarter analysis says Sullivan and Washington counties are the second and third least at-risk Tennessee housing markets vulnerable to declines. That’s based on home affordability, foreclosures, underwater mortgages, and unemployment. The least at-risk market is Blount county. Bradley and Hamilton round out the state counties with enough data to be included in the analysis. The risk factor of all of them is low in comparison to U.S. rankings.

“The Federal Reserve has promised to be as aggressive as it needs to be in order to get inflation under control, even if its actions lead to a recession,” said Rick Sharga, executive vice president of market intelligence at ATTOM. “Given how little progress has been made reducing inflation so far, the Fed’s actions seem more and more likely to drive the economy into a recession, and some housing markets are going to be more vulnerable than others if that happens.”

Counties were considered at risk based on the percentage of homes facing foreclosure, the portion with mortgage balances that exceeded estimated property values, the percentage of average local wages required to pay for major home ownership expenses on median-priced single-family homes, and local unemployment rates. The conclusions were drawn from an analysis of the most recent home affordability, equity and foreclosure reports prepared by ATTOM. Unemployment rates came from federal government data. Rankings were based on a combination of those four categories in 575 counties around the United States with sufficient data to analyze in the second quarter of 2022. Counties were ranked in each category, from lowest to highest, with the overall conclusion based on a combination of the four ranks.

The second-quarter patterns – based on gaps in home affordability, underwater mortgages, foreclosures, and unemployment – revealed that New Jersey, Illinois, and California had 33 of the 50 counties most vulnerable to potential declines. The 50 most at-risk included nine in and around New York City, six in the Chicago metropolitan area, and 13 spread through northern, central, and southern California. The rest of the top 50 counties were scattered across the U.S., including three in the Philadelphia, PA, metro area. At the other end of the risk spectrum, the South and Midwest had the highest concentration of markets considered least vulnerable to falling housing markets.

The ongoing wide disparities in risks throughout the country comes during a time when the U.S. housing market faces headwinds that threaten to slow down or end an 11-year surge in home prices.

Tri-Cities area existing home sales have softened as mortgage rates have doubled from this time last year, and inflation remains near a 40-year high. However, the most recent risk gaps do not suggest an imminent fall in housing markets anywhere in the nation. Home prices have risen more than 10 percent in most of the country over the past year, with new highs hit in the vast majority of metropolitan-area markets. That has kept homeowner equity and home-seller profits rising.

So far this year, existing home sales are down 10.4 percent in Sullivan county and the eight-month typical price is 21 percent higher than last year.

Washington Co. sales were down 11.3 percent during the first eight months of the year and the typical price is up 22.2 percent.

Sullivan is not only the second lowest risk, but it also has the least expensive median sales price – $210,000 – and is the most affordable housing market in the analysis.

Washington Co. has a third less risky level with a $255,050 second-quarter median sales price, which put it on affordability par with Blount, Bradley, and Hamilton counties.

Those affordability rankings are based on how much a person’s or household’s income goes to housing. Here’s how those rankings look:

Sullivan – 21 percent

Bradley – 29.9 percent

Washington – 30.2 percent

Hamilton – 31.8 percent

Blount – 32.9 percent.

All the counties had less than 6 percent of mortgaged properties underwater.

Brandley – 3.3 percent

Sullivan – 3.9 percent

Washington – 4.5 percent

Bradley – 4.5 percent

Hamilton – 5.3 percent.

Foreclosure filings were:

Bradley – 12

Blount – 18

Washington – 20

Hamilton – 28

Sullivan – 30

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Categories: REAL ESTATE