Don't Believe the Hype

Making sense of senseless housing-market rankings.

By Matthew Halverson December 18, 2008 Published in the October 2008 issue of Seattle Met

FORBES.COM’S RELENTLESS REAL ESTATE proclamations typically read like twisted outbursts from a listing agent who’s gone from reading the tea leaves to crushing and snorting them: “America’s Recession-Proof Cities”! “Worst Cities for Homeowner Debt”! But the site officially went off the reservation in July, when it went from ranking Seattle the fifth-best real estate market for investment at the beginning of the month, to saying the city was home to the third-most overpriced zip code in the country by the end of the month. And in between, it rated us 16th among the best cities to rent a home and first among the country’s increasingly unaffordable cities. It was a rankings bender that gave new meaning to “housing meltdown.”

It’s also the kind of factually debatable headline fodder that can mess with prospective buyers’ heads. “As you keep on getting these conflicting ideas and you keep on reading what’s being said in the national press, it’s very easy to get stuck in the mentality of the negative media,” says Matthew Gardner, a principal at the Seattle office of real estate advisory firm Gardner Johnson. After scratching our heads over the conflicting, which-way-is-up rankings, we asked Gardner to weigh in on their methodologies. And the assessment from the former adviser to England’s royal family? It’s all a load of bollocks.

Important things to keep in mind: based its “most overpriced zip code” ranking on 98104, which is the mostly commercial Pioneer Square neighborhood, and the site conveniently overlooked Seattle’s topographic restrictions and the state’s strict Growth Management Act, both of which limit supply. Things aren’t necessarily rosy on the housing front—Gardner admits that the housing market is slowing down and we’ll see a decrease in net value next year—but it ain’t as bad would have you believe. “You want really, really bad news?” Gardner says. “Go to Southern California. Go to Arizona. Don’t come here.”

Filed under