Real Homes of Genius: Today we Salute you Riverside with our Real Home of Genius Award. Taking Porcelain to Another Level.
Sometimes you have to wonder if banks aren’t desperately waiting for the moment in which the government simply nationalizes the whole shebang. The mother of all bailouts. Call it the uber bailout in which we inject so much capital into the system that we actually become the system. After you see today’s Real Home of Genius, you will understand why I am arriving at this somewhat obvious conclusion.
One of the main reasons central banks came about was the idea of the lender of last resort. That is, when banks stop lending who would be there to step in to fill the void? Ben Bernanke has pretty much put to rest any notion that the Fed is not only the lender of last resort but of first, second, and third resort. How much action is Bernanke taking with the markets? Let us take a look at a couple of charts:
*Click for a sharper image
These two charts do a good job summing up the current situation. The Federal Reserve is running out of arrows in its quiver. We have already reached 0 percent with the lowest term treasuries. In addition, banks are borrowing like mad already matching the $700 billion TARP amount through other mechanisms. The Federal Reserve has over $2 trillion on its balance sheets yet they continually deny the American public the ability to look inside its books. As the revered Madoff once said this is, “basically, a giant Ponzi scheme.”
I have to find some humor in that depository institutions are exchanging questionable assets for treasuries while at the same time we are injecting capital into them via the $700 billion TARP plan. Isn’t this like a double bailout? First, we already know that the assets they are exchanging are questionable. Why? If they weren’t questionable they would be trading them on the open market. The reason banks are still not lending to one another is because they know how corrupt their balance sheet is and what would make them suspect their neighboring bank would be any different? Early in the week, I heard Steve Forbes on the KNX Business Hour saying the government should suspend mark-to-market. I bet he would like that. How about we suspend any stock tickers from showing low bids?
Every once in awhile I see a home that shocks me in a certain way. Maybe the agent forgot to move the unsightly garbage can before taking the picture of the home. Or maybe the agent wanted to take a picture with two cars parked on the lawn. Sometimes it does make you wonder. But today we get a home where we say, “okay. Are you trying even just a tiny bit here?” Today we salute you Riverside with our Real Home of Genius Award.
Waiting for the 2009 Bailout
At first glance, we see that the home is boarded up and the grass has the foreclosure yellow we have grown accustomed to here in Southern California. Riverside is part of the Inland Empire which has been decimated by the housing bubble bursting. The median price for Riverside County is now $230,000 down a stunning 35% in one year.
The above home was brought to my attention by another shocked reader to the site. Given that we have covered nearly 100 Real Homes of Genius here in Southern California, it takes a lot to shock me with a home. Gutted homes. Steel pipes on the lawn. Big garbage can taking up half the picture of the home. Torn up lawns. You wonder if people are trying. Well in this case, it is taken to another level.
This home has 4 beds and 2 baths sitting on 1,954 square feet. A good sized home. Looking at the above picture, it appears to be in decent condition. The current zip code for the home above is down 42% in one year to a median price of $225,000. This home is lender owned but this picture will shock you so be forewarned:
Bwahahahaha! I went ahead and pixilated out the picture but I think you know what is behind the blur. I kid you not, this is from an actual listing. Now seriously, what in the world is the purpose of this? Going back to the beginning of the article, I hold firm that some lenders simply want the government to pop in and bail them out. Not help them overcome their economic problems but to take them over like some form of Soviet state planning. Why else would you post a picture like this? Maybe you think come 2009 we are going to get a blanket bailout.
So let us now look at some data:
Current Price: $170,900
Previous sales history
Okay, so the current price tells me they want this place to sell but that picture tells me they don’t. This isn’t like selling a $50 item on eBay and maybe someone just got lazy and took a really bad picture with an old cell phone presenting the item in a bad light. We are talking about $170,900 here. Maybe this home is a statement piece. I think someone may have found the bottom of the housing market here.
Today we salute you Riverside with our Real Homes of Genius Award.
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