Organizing Content

Hello,

Here is what I am trying to do. I am listing restaurants on my site. I want to be able to have the user click their city, then a new page will load with all the neighborhoods in that city while listing all the posts for that city. IF they click on a neighborhood it will only list the deals in that neighborhood.

Currently I am trying to do this with the cities as categories, and the neighborhoods as the children of those categories. I then create a menu with the category breakdowns. This works ok, but lists the posts as archived.

Is this the best way, or should I be looking at something else?

Thanks in advance!!