From Bloomberg, September 15:
- Counties seen most vulnerable to price declines in ranking
- Rising rates are hurting home sales, boosting unaffordability
Homes in and around New York City and Chicago are most vulnerable to price declines in a potential economic downturn, according to a report released Thursday by real estate data analytics firm Attom.
Of the 50 counties most at risk, nine are in and around New York City, six are in the Chicago metropolitan area, and 13 are spread through California. These counties have high levels of unaffordable housing, underwater mortgages, foreclosures and unemployment. In contrast, counties least at risk -- concentrated in the South and Midwest apart from Chicago -- have lower such levels.
After a pandemic-related boom, the Federal Reserve’s aggressive tightening policy and elevated inflation are crimping the once-booming US housing market. Rising mortgage rates have helped to dampen sales and force an increase in income needed to cover a typical home payment.
“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,” said Rick Sharga, executive vice president of market intelligence at Attom....
....MUCH MORE
It looks like these are counties surrounding the core cities.
In addition, Chicago and Cook County have a whole 'nother set of problems which Bloomberg/CityLab addressed in an article yesterday:
Chicago Faces Deep-Seated Ills in Shadow of Citadel-Boeing Defections
Crime, taxes dim city's luster as business leaders seek new course.
Chicago entered a financial death spiral a few years ago where the politicians promised the public sector unions so much in pay/health care and pensions, in return for votes, that there is no way to pay the bills. As the highly taxed, both corporations and real persons, realized this, and the social problems that most American city governments have fostered, the highly taxed took their money and left, speeding up the day of reckoning.
I hate shorting interest-paying debt so selling the municipal bonds isn't as attractive as it could be—where are muni strips when you need them?—but a quick look to see if any of the monoline insurers were stupid enough to guarantee principal and interest on Chicago paper might prove remunerative.
