Housing Markets in Select Areas Face Heightened Risks of Downturn
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Real estate markets in Illinois, New Jersey, and California are vulnerable to downturns due to high foreclosures, unemployment, and underwater mortgages.
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Major metro areas like Chicago, New York City, and central California are especially at risk due to unaffordability and lingering pandemic impacts.
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The South, Midwest, and New England are more stable in comparison.
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Root causes include rapid price increases during the pandemic, housing shortages, increased demand for larger spaces, and more investor activity.
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While the most vulnerable housing markets have greater risks, an imminent crash is not necessarily signaled for any specific location.