Introduction to Micro-Markets

National Foreclosures Increasing

The past two weeks saw all the major news organizations lead their nightly broadcasts with stories on the May slump in most major economic indicators. Each story featured prominently the national decline in home prices and an increase in foreclosure activity. Certainly, these matters are – and should be – of major concern. However, it must be said that the information is neither new nor was it unexpected to those of us who closely follow market trends. Moreover, the focus on the hardest hit regions creates a distorted picture of the overall real estate economy, and in particular what is happening in our area.

California Home Prices Continue to Drop

It is without dispute that, as a region, Northern California home prices have dropped since January 1st. Case & Shiller’s May 31, 2011 report shows that San Francisco area prices declined by 2.7% through March 30th (or down 5.1% when contrasted with the same period last year). These statistics reflect the increased number of foreclosed (or REO) properties hitting the market following the expiration of the foreclosure moratorium during the last 6 months of 2010. In addition, the state’s continuing higher-than-the-national-average unemployment numbers are compounding the problem, as more cash-strapped homeowners are forced to stop paying their mortgages in order to pay for increased food, energy and health care costs. And the expiration of last year’s home buyer credit also has impacted sales activity.

Know Your Bay Area “Micro-Market”

But just as the Bay Area experiences “micro-climates” so too do we see “micro-markets” within the regional real estate economy. Of particular note are rapidly spiking rental rates in the most desirable neighborhoods of San Francisco itself, a trend local experts predict will strengthen metropolitan prices and sales activity as renters opt to purchase limited housing stock. In addition, home prices in San Mateo are also increasing rapidly, reflecting a new “high tech” bubble. In contrast, prices in many outlining, non-luxury suburban communities (Vallejo, Concord, etc.) remain soft.

The bottom line is to know your specific “micro-market.” Don’t rely on national statistics; rather, search out the most specific, accurate and current data regarding your particular region and plan accordingly. Do all you can to become better informed on how to handle the various types of short sales, which will remain a dominant portion of the market for the foreseeable future. Build strong relationships with the real estate, financial, tax and legal professionals who demonstrate superlative skill and experience. I truly believe that few realtors will survive and thrive in the coming years without a solid foundation in how to successfully handle “distressed property” transactions. Until next week….

Brian Ripley's Video Welcome!

I’m here to inform and educate property owners, and the professionals who advise them, on matters affecting the strategies they develop, and the decisions they make, regarding their properties. 

Help with Underwater Mortgages

Welcome to my inaugural blog post, which I am launching concurrent with the roll out of my “new and improved” website,

My Objectives

My objectives in starting this blog and website are multiple: 

  • Act as a reliable source for important developments affecting the “distressed” property market in the San Francisco Bay Area;
  • Inform and educate property owners, and the professionals who advise them, on matters affecting the strategies they develop, and the decisions they make, regarding their properties;
  • Facilitate a conversation on how we can all work collaboratively, with each other and with lenders, to achieve better and more predictable short sale results.

About Me

A little about me:  I have been practicing law in the Bay Area since 1983.  In 2007, the primary focus of my practice shifted to “underwater” real estate following the meltdown in the state and regional economies.  Since that time I have counseled over 1,000 property owners on issues relating to their real estate investments.  I have presented dozens of seminars and workshops for real estate and financial professionals on how to succeed and thrive in this challenging new economy.  As a result, I am now considered among the region’s most knowledgeable and experienced experts in the field of “distressed” real estate.

The Focus

Each week I will share my perspective on “what’s really happening” in the underwater property market.  I recognize some of my comments may ruffle feathers.  But I believe it is critical that as a community we bring real clarity to the table, foregoing both the “doom and gloom” rhetoric pervasive in the media and the “Pollyanish” optimism too often prevalent among industry commentators.  Armed with accurate information and an attitude of cooperation among all the players, we can move beyond merely surviving these difficult times by building a community of like-minded professionals who are succeeding and thriving in the face of adversity.