An economic downturn would cool housing markets across the country, but few areas appear more exposed to price declines than New York City and Chicago.
The two metropolitan areas are home to some of the bubbliest markets in the country, according to an analysis by real estate data firm Attom. Of the 50 counties most vulnerable to falling home prices, nine are in and around New York City, and six are in the Chicago area.
The analysis, first reported by Bloomberg, ranked 575 U.S. counties based on foreclosure, unemployment and mortgage delinquency rates, as well as general affordability. The data comes as mortgage rates climb above 6 percent for the first time since 2008, and inflation — which includes housing costs — remains high.
Attom’s Rick Sharga (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,” Rick Sharga, a research executive at Attom, told Bloomberg. “Some housing markets are going to be more vulnerable than others if that happens.”
While Manhattan ranked 52nd on the list, its surrounding suburbs showed even greater risk of price declines. Passaic and Essex counties in Northern New Jersey claimed the top two spots. Bergen, Ocean, Union and Sussex counties also placed in the top 50, as did Brooklyn, Staten Island and Rockland County.
In the Chicago area, Will County placed fifth on the list, followed closely by Cook and Kendall counties in sixth and seventh. Cook County was the only county in the top 25 with more than 1 million residents.
California was also well represented, with 13 of the top 50 counties. California, Illinois and New Jersey alone accounted for 33 of the 50 most vulnerable counties.
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