Time to Jump on Foreclosure Bus Tour?

Is it time to jump aboard the foreclosure bus tour or avoid the real estate market altogether?

Some consumers are eagerly hunting for a good deal while others are not yet swayed by the incentives being offered by homebuilders.

The latest sales gimmick used by realtors is gathering a busload of potential home buyers to show them foreclosed homes. In San Diego, Coshow Real Estate Group launched its REPO Express to show would-be buyers bargains, the Union-Tribune reported. Coshow Real Estate Group took about 20 clients to see condominiums that were repossessed by lenders.

Saddled with growing inventories, lenders are eager to negotiate. On the tour, several condos had been reduced by tens of thousands of dollars compared to their asking prices.

Beatrice Doblado, 68, told the paper she bought several foreclosed homes during the last housing slump of the mid-1990s and said, "It has paid royally. This time I am looking for something small that I can retire and move into," she said.

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During the three-hour tour, clients saw eight condominium complexes, including a posh two-bedroom unit at The Renaissance that had an asking price of $605,900. The downtown condo had been listed for $649,900.

Other real estate firms have been showcasing trips to foreclosed homes, including the Home Repo Tour in Chula Vista.

San Diego County's home foreclosure rate rose in December with the number of defaults in 2007 setting an annual record. The start of the foreclosure process increased by 128 percent to 20,138 in 2007, according to DataQuick Information Systems. Foreclosures rose by 353 percent to 7,349 during 2007.

The Commerce Department reported that U.S. builders cut prices by more than 10 percent in December, which still failed to increase sales. Sales declined by 5 percent to the lowest level in nearly 13 years, the Commerce Department reported.

"The housing recession is still bottoming out," Christian Menegatti, managing editor and analyst for the Roubini Global Economics Monitor, told Marketwatch. Sales of new homes declined by 4.7 percent to a seasonally-adjusted annual rate of 604,000 in December. In 2007, new home sales fell by a record 26.4 percent, the lowest level since 1996. "A lousy end to a lousy year," said Richard Moody, chief economist for Mission Residential, according to Marketwatch.

Sales fell in three of four regions in December, with only the Northeast showing a 6 percent gain. Sales dropped by 1 percent in the Midwest and by about 6 percent in the West and the South. The median sales price fell by a record 10.9 percent to $219,200, compared with November. Compared to 2006, the sales prices declined by 10.4 percent. Some consumers feel this is the right time to buy. In Illinois, Fran and Mark Gable braved the single-digit temperature to find a four-bedroom house to purchase, The New York Times reported. "Blood in the streets!" Ms. Gable said cheerfully. "That’s the best time to buy."

Ms. Gable said they are willing to take a chance even with their first child on the way.

Kimberly Raber, a sales assistant at a pharmaceutical company in California, is trying to buy a three-bedroom condo. She has been house hunting for six months, but her negotiations stalled when she offered $363,000 and the seller wanted $377,000.

"Now that the rates have gone down, we’re hoping to meet in the middle," said Ms. Raber.

Otha Greer with Coldwell Banker in Atlanta said the drop in rates has boosted her business, according to The New York Times.

"I actually had an investor that called yesterday and she’s interested in buying five homes," she said.

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