LH Press Library
The Forbes Fallout
Article creates buzz, raises many questions in Lake Highlands real estate circles
Lake Highlands People, by Jessica Elliott
April 7, 2006
On March10, Forbes magazine published a list of the “Best and Worst Neighborhoods to Buy a Home,” which made bold assertions: In Dallas, Lake Highlands is one of the best neighborhoods for prospective homeowners, while Oak Cliff is the worst, judging by appreciation figures.
Several area Realtors said they were concerned about the accuracy of Forbes’ numbers. Peggy Hill, of Virginia Cook Realtors, questioned not only how the magazine arrived at its finding that Lake Highlands appreciated 125.3 percent from 2003 to 2005, ranking it third in its list of best neighborhoods, but also the accuracy of the magazine’s article that reported the neighborhood’s prices had dropped by 60 percent in the last quarter of 2005.
According to the article, written by Sara Clemence, Forbes used OnBoard, a Brooklyn-based real estate information company, to gather data on median home prices for every ZIP code in 20 major U.S. cities.
Forbes employees then “searched for the best performing and worst performing in each city since 2003 and determined the neighborhood or neighborhoods primarily associated with each ZIP the article states.
“We didn’t go by neighborhood, we went by ZIP code first, and then we looked at what neighborhoods were basically in that area,” said Clemence, who is a staff editor at Forbes, in a phone conversation. “People often have different opinions on where boundaries are drawn, while ZIP codes are drawn from the U.S. Postal Service?’
But the 75231 ZIP code associated with Lake Highlands, for instance, runs up to Central Expressway, includes Presbyterian Hospital, and doesn’t include the L-Streets, which are under the 75238 ZIP. Additionally, Forbes listed Oak Cliff under the 75211 ZIP code, which is typically used for West Dallas, and is an area that is “coming on strong,” according to Betty Tatum, a Realtor with Briggs-Freeman.
“In my opinion, they’re not using valid information,” said Carolyn Norton, sales manager of Wynne Real Estate Brokerage. “I think it’s probably next to impossible [to gather data] because neighborhoods are not defined in a legal description, so neighborhoods mean different things.”
Norton said that the only way for even a Dallas area Realtor to come close to a factual appreciation estimate is by requesting statistics from the Multiple Listing Service, data compiled by the Real Estate Center at Texas A&M.
But the MLS map used, which is defined by areas, doesn’t group neighborhoods as residents living in those neighborhoods would define them. There are sub-areas, she said, but they aren’t designated by neighborhood, just by streets.
While it is hard (next to impossible) to track appreciation, Hill said, any jump in numbers in Lake Highlands could be attributed to the “updating that people are doing combined with moderate appreciation;’ she said.
“But the houses that are bringing that really high dollar square foot are much newer construction or dramatically updated. But how much do you apply to appreciation or improvement?”
Whether Forbes’ figures accurately reflect the market or not, the article, which has created hubbub among Lake Highlands residents, could have an impact on the neighborhood.
“That has brought us tons of attention, and media attention,” Hill said, adding that she put an updated Lake Highlands home on the market March12. “It had 20 showings in five days and six offers. It was $247,500. In a price range under $250 that will almost sell in a New York minute if it is in Lake Highlands. Did the [Forbes article] have an affect on it? I don’t know what is bringing all of these people to Lake High lands.”
But, Norton warned, it could also have a negative impact.
“It could harm it to think that there’s no appreciation left, and if something goes up 125 percent, that might steer people away from that area,” she said. “They might say that Lakewood had less appreciation, so that might steer them there.”
Either way, Ellen Terry Realtor Nancy Johnson also has prospective buyers clamoring for a Lake Highlands house listed at $390,000, while the median price of a home there is around $250,000.
“I think that when people are on the fence about purchasing, and they listen to a media [article] … I think they jump on the bandwagon. By the same token, when they think that they are going to be able to see an increase in price, they are more tempted to buy.”
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