Is that house really only $2,634
I had an inquiry yesterday about a home for sale that was listed for just $2,634. Is that really possible with all the talk about today's distressed housing market.
In a word, no (it was simply a data entry error by the listing agent putting the street address where the price should be) but it seemed like a good segue to how much the government should be paying for the toxic assets in the "mother of all bailouts".
Obviously the lenders made some mistakes (OK, a bit of an understatement) so how much should they be able to recover from the taxpayers under the Paulson / Bernanke plan to allow them to sell their bad assets back to the taxpayers. The credit and liquidity crisis stems from the fact that the "paper" can't be valued, that it is basically worthless because no one wants to buy it except at fire sale prices.
But are home values that are at the root of the paper worthless or pretty close to worthless like just $2,634. Well, in the Charleston real estate market, we haven't seen the serious price declines like California, Florida and some of the other overheated markets. The median price apparently has declined by approximately 3% in the past year so a home that was worth about $200,000 is now probably $194,000. In places like California or Florida, if prices have declined by 30%, a home that was $500,000 in California is probably closer to $350,000 today. There is still a long way to go until it is worth nothing.
So while I am not in favor of the government offering "full price" to bail out the miscreants who foolishly lent too much to too many who shouldn't have been able to purchase a home, what is the prudent amount to buy these distressed assets for.
Tom Petruno has an interesting take in the LA Times, Bailout dilemma: How hard to squeeze the banks on loans.
My take, maybe not $2,634 but certainly not $472,500. 
And I'll vote for some oversight by someone who actually knows what they're doing.