No Light Rail in Vancouver!

Home Grand Jury Findings Rail Supporters Europe Rail Neighborhood The Plan Cars The Bridge Publications No Tolls!
Light rail costs too much, does too little

Most Overpriced Zip Codes?

Aug 5

2008

The Antiplanner grew up in the Rose City Park neighborhood of Portland, Oregon, zip code 97213, so it is with some pride that I read that Forbes magazine has declared 97213 to be one of the 10 most overpriced zip codes in the U.S. Forbes considers housing overpriced when the monthly mortgage you would have to pay to buy a house is significantly more than the rent for that house. Since few houses are for sale and for rent at the same time, as a proxy, Forbes divides the median home price by the median annual rent on homes with the same number of bedrooms in a zip code.

Frankly, this is just another effort by Forbes to get you to watch one of their advertisement-laden slide shows. So, to save you the time, here are the magazine’s rankings of the 10 most overpriced zip codes:

In other words, a house in TriBeCa will cost you 36 times the annual rent you would expect to pay for a rental home in the same zip code. Forbes only looked at the nation’s 40 largest cities, so suburbs and smaller cities are not included.

Most of the cities on the list are overpriced due to land-use regulation, but Dallas? Dallas doesn’t have much regulation. Why would it be so overpriced?

As some of the comments on the Forbes article point out, few of these zip codes are homogenous. In other words, the quality of the average 3-bedroom home for sale may be much higher than the average 3-bedroom rental. Forbes says that, in addition to number of bedrooms, it adjusted for price per square foot. But how do you adjust for price per square foot when that is exactly the indicator — rental vs. sale price per square foot — you are trying to distinguish?

.   Neighborhood       City             Zip       P:R

.   TriBeCa            New York         10013     36.3

.   Chinatown          Boston           02111     30.5

.   Downtown           Seattle          98104     30.3

.   West Hollywood     Los Angeles      90038     30.2

.   Mission Hills      San Diego        92103     30.0

.   Outer Sunset       San Francisco    94122     28.5

.   Coronado           Phoenix          85006     27.1

.   Greenway Parks     Dallas           75209     26.7

.   Rose City Park     Portland         97213     26.6

.   Willow Glen        San Jose         95125     26.1

 

So I don’t put much faith in the Forbes article. I suspect a more realistic assessment would find the 10 most overpriced zip codes would almost all be in California, mostly in the San Francisco Bay Area. Still, it is an honor to have my old neighborhood included, and now I must get a note off to my parents, who still live in 97213, telling them to sell while the market is still overpriced.

27

Trackback  •  Posted in News commentary  

Reprinted from The Antiplanner