On the vulture bus

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Real estate road trip scouts troubled markets

(Washington Post) – A new form of sightseeing is catching on in the Washington suburbs, offering investment advice, free cookies and some eye-opening discoveries among the empty ramblers and forsaken townhouses of the region.

They are known as foreclosure tours or home buyer tours. One that originated yesterday at a Northern Virginia Long and Foster office was labeled “The Centreville Gateway Foreclosure Tour of Homes.” More than 30 “tourists” squeezed onto a green passenger bus for a three-hour spin through parts of Fairfax, Loudoun and Prince William counties. Some said they were looking for their first home, others were looking for a good investment, and some were just looking.

“I figure it’s probably a good time to get into the housing market,” said Anita Walter, a Centreville resident who saw an ad for the tour in a community newspaper. “I’m curious to see what’s out there, but I want a home that will be my home.

“I’m not trying to turn around and make a quick buck,” she said.

For homeowners and investors worried about the state of the housing market, the tours and their growing popularity are a sign that falling housing prices are attracting an increasing number of potential buyers — including those willing to travel in packs. Long and Foster offices have staged similar tours in Manassas, Gainesville, Alexandria and Mount Airy. Ones are planned in Prince George’s County and Southern Maryland.

“The general public doesn’t know how to find foreclosed properties,” said Pat Bogenn, a Long and Foster real estate agent. “There are deals out there, but there are also pitfalls.

“With bank-owned properties, most people don’t know that they’re buying ‘as-is,’ ” she said. Potential buyers might need to have utilities reconnected just to find out whether pipes are broken or the septic system works, Bogenn said.

The main draw of the tours is that they are a kind of rolling foreclosure seminar, counseling participants in everything from financing to property inspection to legal concerns.

“The benefit of this is that everyone is here at one time,” said Debbie Jeffries, a Centreville resident who was hunting for something with enough garage space for her mint-condition 1985 Lincoln Town Car. “I want rock-bottom prices.”

There was a home inspector on board to point out maintenance concerns and estimate repair costs, as well as two lenders and a real estate attorney. All of the homes on the tour were vacant and bank-owned, which eased some of the ambivalence participants felt about taking over a property its previous occupants might not have parted with willingly.

“It’s unfortunate that foreclosures have happened, but they can’t be reversed,” said Alex Bogenn, a real estate agent and Pat’s husband. “By filling the empty houses, we’re ensuring the integrity of the neighborhood, and it’s bringing money back into our economy.”

Kellian McIlwrath, a loan officer from Wells Fargo-affiliated Prosperity Mortgage, told tour participants it was the first time in memory that property shoppers could reap the benefits of both low prices and low interest rates.

Article continues here.

5 comments ↓

#1 Derrick on 03.31.08 at 7:16 pm

Hi Garth:

Just finished reading your new book … very refreshing …
unfortunately, most Canadians are past the point of no return.

I have listened to your advice over the years and am very thankful for
your words of wisdom.

While the credit for encouraging me to start an RRSP in 1994 goes to
my Dad, reading your first book shortly thereafter simply provided
more confidence that I was making the right choice.

I am now 40 and just recently semi-retired thanks to maxed out RRSP
contributions and some very timely investments in the markets in the
past couple years. I am very happy to rent an apartment … while
many have viewed me as a second class citizen for being a renter … I
now can enjoy having complete control of my time and I have to admit
there is a bit of satisfaction in having the last laugh. :)

Thanks again for your advice …

Take care,

Derrick
Edmonton

#2 DJ on 03.31.08 at 7:18 pm

Hey Garth

Just got your book this morning and just finished it today.

It was great. Thanks for writing the book. I really appreciate the earth changes you put in it. I recently wrote a book about the more intense changes and finanical system and notice it can be tough warning people abou this stuff. I find people don’t want to hear the truth because it can scare them.

Yet, after a few years you will be considered a prohet :)

#3 William on 03.31.08 at 9:14 pm

I just read the Article in the Vancouver Sun where Mr. Turner basically says: “what happened in the USA could happen in Vancouver and you’re a fool if you don’t sell and a bigger fool if you buy”.

Strikes me that opinion in the Vancouver market is out of line with CMHC sales data that shows prices are pretty stable here and have been for the last 6 months.

But hey, why let facts get in the way of a sensational opinion? To promote a book you need press coverage. Alarmism gets media attention. A nice way to sell personal financial books is to feed off the latest fear factor in all of us.

More power to you Garth, I hope you get rich on the fears of your constituents. I’m in no position to tell a Hamilton MP how to do his job, but I’m going to anyway: in an area where I’m sure housing prices have declined due to a weakened economy, A MP’s time might be better spent trying to figure out how to fix that local economy rather than promoting books in BC based on fear alone.

First, I did not tell anyone in that article to sell their home. Second, Vancouver is the riskiest real estate market in Canada with an average home price of $712,000. Third, I don’t represent Hamilton. Fourth, I scare everybody. Fifth, so ignore me – and good luck. — Garth

#4 SMWhite on 03.31.08 at 11:10 pm

Sounds like your upsetting the herd Mr. Turner…

I’ve questioned some of his antics in the past but he is right on on this one.

If you question the validity of Garth’s analysis and comments, after you read his book(or don’t) pick up a copy of Robert Shiller’s Irrational Exuberance, second edition, as the first edition “only” predicted the .com crash. The second focuses more specifically on real estate an the psychology of the markets; and all the air coming out of the world-wide housing bubble.

Mr. Shiller is more then reputable in the world of economics, not only as the professor of economics at that Yale school but more importantly he’s the “Shiller” of the S&P Case/Shiller Index which tracks real estate data in the USA. He’s claimed Vancouver as one of the “bubbliest” cities in North America.

http://www.theglobeandmail.com/servlet/ArticleNews/TPStory/LAC/20050426/RTIP26-1/TPBusiness/?query=shiller

I trust CMHC as must as I trusted David Lereah, chief economist of the NAR when he was telling people in late 2006 to snap up Florida condominiums before they all disappeared.

Look at the graph below, notice anything similar? Vancouver is just a little bit slow on the curve.

http://langley-financial-planning.blogspot.com/2008/02/bubblier-than-bubbliest.html

Over-speculative condo buying in all major Canadian centers has enormous potential to bring down housing, and will, just like in the late 80s. Although maybe CMHC will come out with a 50 year mortgage, wouldn’t that be sweet.

David Dodge, the ex head of the Bank of Canada if you aren’t familiar with the name, warned of the 40 year amortization and CIBC came out immediately after and criticized him. CIBC has since admitted this spring to 25 billion in investments tied to monoline insurers in the US along with 4+ billion in sub prime losses.

Until 2007 monoline insurers had NEVER been downgraded or defaulted, until 2007…

The foreshadowing, can’t you see it? The guy that helped stir Canada from its last recession to bring us back to being an economic power is saying, CMHC, what you did with the 40 isn’t feasible and the guys that are selling you worthless paper are saying, sign up for that mortgage!

So wish REALLY hard like CIBC has been over the past 6 months and EVERYTHING will be swell, good luck in Vancouver with you “investment”.

http://www.macleans.ca/business/wire/article.jsp?content=b100185A

http://www.financialpost.com/creditcrunch/story.html?id=383933

#5 Jeff on 04.01.08 at 12:36 am

William:
Wake up neighbour! I am a Realtor in Vancouver and word on the street amongst Realtors is that we’re due for a 20% correction. And I am of the opinion that Vancouver will experience a 40% plus crash.