Parts of Illinois face real estate risks due to the pandemic

[July 30, 2021]  By Kevin Bessler

(The Center Square) – A new report indicates the real estate markets in some Illinois counties are vulnerable to the COVID-19 pandemic.

The real estate website ATTOM reports markets were considered at risk based on the percentage of homes facing possible foreclosure, the portion with mortgage balances that exceeded the estimated property values, and the percentage of average local wages required to pay for major homeownership expenses on median-priced houses or condominiums.

Rankings were based on a combination of those three categories in 564 counties around the country with sufficient data to analyze in the first and second quarters of 2021.

Several Illinois counties made the list. They included seven that cover Chicago and nearby suburbs, including Cook, Kane, Kendall, Lake, McHenry, Will and DeKalb counties.

Others in Illinois were Kankakee County, Madison County and St. Clair County in Metro East, and Tazewell County near Peoria.

Geoffrey Hewings, emeritus director of the Regional Economics Applications Laboratory at the University of Illinois, said existing housing market conditions won’t help.

“A house that was selling for $150,000 two or three years ago is now selling for $175,000 or $200,000, so you have that problem as well,” he said.

At least 15% of mortgages were underwater in the first quarter of 2021 in 33 of the 50 most at-risk counties. Those with the highest underwater rates in Illinois included St. Clair County with over 43% of mortgages underwater, and Kankakee County at 27%.

ATTOM reports more than one in 2,500 residential properties faced a foreclosure action in the second quarter of 2021 in 40 of the 50 most at-risk counties. In Tazewell County, one in 905 residential properties faces possible foreclosure. Nationwide, one in 4,046 homes was in that position.
 

ATTOM also recently released its Mid-year 2021 Foreclosure Market report, showing that there were 65,082 U.S. properties with foreclosure filings this year, down 68% from the same period last year. Only 5 out of the 220 metro areas mentioned in the report had an increase of foreclosure filings, including Springfield, where such filings were up 19%.

In addition to Illinois, the report reveals that the housing markets in Florida, New Jersey and other East Coast states are the most exposed to the potential economic impact of the pandemic, while Western states continue to have the most favorable market conditions.