I was going to originally talk about McCain's ambition to become Dictator of the United States of America, as he told the editorial board of the DesMoines Register yesterday But I'd rather talk about how utterly stupid we're being regarding the valuation of assets. There are three values we can talk about with regard to real property:
1.) Market Value
2.) Replacement Value
3.) Assessed Value
For any piece of real estate these three are almost always different, but all are indicators of what a property is worth.
If banks are claiming a $0 value for a property, based on the market value, that is about as disingenuous as you can get. Because of SOX accounting rules, the market value of properties have had their values drop an inordinate ammount, as it amplifies the negative pressure on physical assets with values greater than can usually be paid for in cash. A lack of liquidity greatly amplifies the financial distress caused by this apparent decline in value.
Now, however, we can easily assess the value of each of these properties as non $0. For example, each of these properties pay property tax based on an assessed tax value. Clearly that amount on file with various government agencies represents a de facto minimum value. And unless you manage to convince your assessor that your property is worthless, you shouldn't be able to account it for less than the assessed value.
Similarly, for every property that is insured, there is a replacement value associated with it. If my home burns down, I have insurance to cover the cost of replacing the structure. This replacement value represents an actual value of the tangible goods. If you were to attempt to buy a new structure of the same type, it would cost you a certain amount, and that is certainly a "market" value for any property. Just because you can't find a buyer able to finance the property currently, doesn't mean that there isn't a market value to property.
Similarly, if you demolish a house, you are capable of recycling large quantities of the materials. Wood, stone, plumbing, all has a value as more than scrap. Just ask all of the people who've had their plumbing stolen when they are on vacation because the value of copper per unit weight is worth more than the face value of the copper in a penny. So obviously, the value of a property chopped up and sold for parts minus the cost of the demolition is a pretty good indication