Where's the Market Bottom?

I'm coming to a painful realization that I might have to eat my words regarding my S&P500 market bottom call.  I say this because of my recent observations in the bank owned/foreclosure market.  There seems to be too much "optimism" and inventory on the part of the banks!

My wife and I started trolling around the foreclosure markets again and found a potential property.  Its'a 2 bedroom, 1 bath cottage overlooking a lake in a decent neighborhood. It's run down and needs a new septic system, new roof, and lots of inside work to bring it up to date.  The bank foreclosed on the property over a year ago with the judgement amount of $125,000.  That means the the bank was owed $125,000 on their loan when the bank took back the property.

Instead of putting the house back on the market at $125,000 or even $130,000 in "as-is" condition, the bank in their wisdom listed it with a realtor for $225,000!  Based on our calculations, you'd need to pump in at least $100,000 to fix up the place into something that people what to rent or even own.  In this market, there is no way someone would pay list price and then pump in an additional $100k to live in a 2 bedroom, 1 bath cottage overlooking a garbage dump.  As one might expect, they've had no offers and the property remains vacant.  

I highlight this property because its one example of the multitude of properties we've come across in similar condition and cirucumstance.   Compounding this problem is the daily influx of newly bank owned properties to the already excessive inventory.  It doesn't take a rocket scientist, or neural net model, to tell you that something's gotta give and my guess is equity prices.