In today’s Daily Data Discussion post we’ll take a look at the worst performing cities in the nation according to the 2008 Milken Institute’s Best Cities ranking algorithm for large cities. 

We neglected to mention yesterday that the Milken Institute team offers a ranking not only for the larger metroplexes around the country, but for smaller ones also.  Both are available on their website here. 

We received several emails critical of the Milken Best Cities rankings yesterday – here’s one –

“I don’t put much stock at all in the Milken rankings, their 2007 rankings were way off on some cities (on both ends of the spectrum), and I think companies just buy their way on and off the list…..”

We’ve heard the criticism before, and while it’s not our intent to mindlessly defend the Milken Best Cities rankings, I would offer this explanation.  The Milken team does go to some length to explain in their methodology (print version) that the rankings are not meant in any way to be forward looking and should not be used for projections of future performance.  We agree that some of the cities they had ranked highly in their 2007 rankings ended up doing very poorly in 2007.  It’s our guess that some of the cities (California, Florida, and Nevada cities in particular) that have fared very poorly during the single family housing crunch and have also struggled with job growth and have fallen dramatically in the rankings.  We’ll look at doing some correlations of Milken rankings with our own rankings sometime early in 2009. 

Here are the markets in our database as of today with the lowest 2008 Milken Institute Best Cities ranking

1) Detroit-Dearborn, MI  200
2) Holland, MI   199
3) Warner-Troy, MI  198
4) Canton, OH   197
5) Lansing, MI   196

Tomorrow we’ll take a look at markets around the country with the highest Class C Multifamily Cap Rates. 

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