98112 fails to make “wealthiest” list

This is one of those “dog that didn’t bark in the night” kind of stories.  Newsworthy, in other words, for what didn’t happen rather than the other way around.  It has to do with a list that our part of town didn’t make this year:  the Puget Sound Business Journal’s Top-25 “Wealthiest Zip Codes” ranking for the region.  The fact that we’re not on it seemed strange to us since, as far as we could recall, we’d always been on it in the past.

But it turns out that’s not quite true.  We’d apparently been on the list every year until last year, when 98112 suddenly dropped from 10th place to off the list entirely.  In 2009, when Madison Park Blogger last reported on the PSBJ rankings, 98112 was one of only three Seattle zip codes that made the list, the others being 98177 (which includes the Highlands and Blue Ridge) and 98199 (which includes Magnolia).

However, all of the Seattle zip codes dropped off the 2010 PSBJ list, putting a spotlight (though one we missed) on what seemed to be the accelerating shift of wealth in the region from Seattle to the Eastside. The 2011 PSBJ list mirrors the 2010 edition in terms of the Top Ten represented:  Medina’s zip is in the lead, with seven other Eastside zips plus those for Fox Island and Bainbridge Island also making the cut.  The 98112 zip code area, of which Madison Park comprises about a quarter of the population, also includes Montlake, Denny Blaine, and most of Capitol Hill.

Here’s the strange part of the story.  In 2009 the PSBJ estimated the average household net worth for 98112 at $1,127,992, yet this year the PSBJ believes that number is well less than $500,000.  And while PSBJ showed top-ranked Medina’s average household net worth at $2,272,662 in 2009, the paper believes that number is only $830,068 this year, a whopping 63% decline over two years.  Yes, housing values have fallen, but the stock market was actually up during the intervening period.

Though 98112’s current average net household net worth is not reported by the PSBJ, by implication it would have to have been estimated by the paper as being less than the $476,049 it reports for the 25th-ranking zip code on its list this year: 98065 (Snoqualmie).  Given that PSBJ computed 98112’s average net worth at over $1 million in 2009, that would mean a 59%-or-more decline in our area’s wealth since that time.  

Such a huge falloff in our prosperity would really be something to report if it were actually true.  Fortunately, there’s no reason to believe it is.  It seems that in 2010 the PSBJ changed data sources and the new provider computes net household income and net worth on a different basis from that used by the old data gatherer.  This change significantly downshifted the values in 2010 from those of previous reporting periods, making the PSBJ’s 2010 list (and this year’s) not comparable to those of previous years.

It does make one wonder, however, how the information is computed and whether the resulting Top-25 list is even worth contemplating. After all, when the numbers from two different data sources vary by such a wide margin it naturally raises the question of their validity. The PSBJ says it utilized U.S. Census Bureau data, along with information from Nielsen Claritas, which samples households nationally and then interpolates the results by zip code.  The 2010 census numbers for household income, however, are not yet available—and household net worth is not even among the questions surveyed by the Census.

We do know that valid 2010 Census numbers will soon be available for Madison Park specifically.  When they arrive we will, of course, report them.

[Above: Puget Sound Business Journal map (click to enlarge), showing Top Ten area zip code areas based on estimated average net worth of households. Below:  Map showing 98112 geographic coverage area.]