Daily we hear doom and gloom stories about the “US housing market” as if there were only one market.  Similarly, the news media, economic pundits, and others express concern about a “slowing American economy”.

Less frequently does anyone look beneath the surface to see if the generalization fits.  For the housing market, it does not.  Moreover, continued escalating real estate prices in certain cities indicate that the economy in some of those places is doing fine.

Take Seattle.  According to a new housing price index by Forbes magazine and Economy.com, prices have increased in the Emerald City for the past six quarters.  Hardly a sign of slow down or recession.   And they forecast continued increases over the next year.   Forbes and Economy.com also predict that Pittsburgh, Columbus and Dallas will see escalating real estate values.

The Forbes/Economy.com forecast index examined the 40 largest US cities based on: “the state of local economies, new construction contracts, foreclosure rates, local credit markets, sales rates, affordability and inventory. ”

In looking at better-performing cities in more detail, the authors note that some strong markets like Seattle and San Francisco have low inventory, which boosts their ranking.  Other cities like Dallas and San Antonio perform well in the index because they did not experience as significant price increases over the past few years, meaning that there is no bubble to burst.

What the Forbes article discussing the index fails to mention is that places like Seattle and Dallas also have strong, dynamic economies based increasingly around the knowledge economy (but also natural resources, which are doing well).

The Creativity Exchange this week did note that a Business Week report on stronger housing markets listed cities that also happened to perform well on Florida’s creativity index or are superstar cities.

It’s easy and even convenient to treat the US as one economy.  But the United States is huge.  California’s GDP alone would make it one of the world’s largest economies.   And each major city has its own economic dynamic that is unique– although tied to the nation and the world’s financial trends.  Housing prices are a reflection and a part of that unique economic and even social-cultural milieu.  You can’t judge a city’s housing market by national statistics.