Report: Bernanke's own home down 260K in value

Say it isn't so: The Fed chairman, rapidly losing home equity in the housing bust?

Bloomberg News reports Fed Chairman Ben Bernanke's Capitol Hill home is slipping in value and may soon be worth less than he paid for it. An economist quoted by Bloomberg estimates Bernanke's house has lost $260,000 in value.

"Bernanke [pictured] lives in Washington's Capitol Hill area in a four- bedroom, 2,600-square-foot house he bought new in May 2004 for $839,000. Almost four years later, it may not be worth any more, according to real estate records and local agents.                  

More: "'Even though he's the Fed chairman, he's going to get hit -- but I think lot of people will in Washington,' said William Wheaton, an economist at the Massachusetts Institute of Technology. The value of Bernanke's home 'probably went up to $1.1 million and it's probably back down to $840,000,' because prices in Washington just a couple years ago 'got out of control,' Wheaton said."

Comments? Thoughts? E-mail story tips to peter.viles@latimes.com.
Hat tip: Michael Snyder
Photo Credit: Bloomberg News

Comments

[FLEUR]

I'm just a stupid housewife....what do I know?
But I can tell you this much: what goes up, must come down; the economy is always cyclical. Get it: it's a cycle. That means that Bernanke's house will probably increase in value eventually. You know: go back up.
The kicker is this regarding the cyclical economy: if tax cuts remain in place (i.e. Bush's tax cuts) the swing upward will happen sooner and last longer than if the "feds" mess with the economy and start raising taxes which the dems swear they will do.
A Granny somewhere in the U.S.A.

[Bill Wilson]

Not "everybody" is experiencing this btw. I sold my home in Southern CA in July 2005, bought the same size house in the Charlotte, NC area on twice as much land (on a lake) for cash. Banked the difference. The new house has gained 35% since then (30 months) and is holding its value nicely. We have a construction boom going on here with businesses moving here from the high tax Midwest and higher taxed Northeast. Every direction I drive there's new construction. Sorry about y'all. By the way, if you now own commodities...SELL! Just a little tip.

[Richard A]

The value only dropped if he sold it for less than the price he paid. Vaulation occurs only when there is exchange of assets (cash).

[LeavinLA]

So... many... punchlines... where... to... start? LOL

[aaron]

This is just classic CLASS WARFARE rhetoric. Who cares? This isn't news. This is just silliness; and this is why I won't pay for newspapers that engage in such claptrap much less support their sponsors.

[Ward]

I think everyone is missing the point. This is one of the few guys in Washington that actually gets what the real problem is. To not think he doesn't know that the devaluation in housing going on is the worst since the great depression is naive. The Federal Reserve unfortunately can do very little about it though. Yesterdays action by the govt with FNMA and Freddie is what was needed.

[Michael]

Two posters mentioned conflict of interest. Why is it a conflict of interest for the Fed chairman to own a house? If food prices spiral out of control, would it be a conflict of interest for the Fed chairman to go to the supermarket?

[Barney]

Maybe, his friends on Wall Street who received $ 39 billion in bonuses in January will buy his house as a fourth vacation home.

[baruza]

In more important news, the New York Fed just announced they're accepting a wider range of Wall Street garbage in exchange for good ol' taxpayer treasuries.

From Bloomberg: "The new eligible collateral for the TSLF includes agency collateralized-mortgage obligations and AAA/Aaa-rated commercial mortgage-backed securities, in addition to similarly rated private-label residential mortgage-backed securities and any collateral normally eligible for Fed open-market operations."

http://www.bloomberg.com/apps/news?pid=
20601087&sid=aVL8jQ3AglT0&refer=home

Looking at the money Bernanke has tied up in his home is shortsited. The thing to look at is his much more lucrative exit options in finance. This is why the Fed looks out for its banker buddies and not the taxpayers: that's who'll be paying their officials the big bucks once they leave.

[Lou]

A house is a box that you keep your stuff in, not an investment instrument. My wife and I have been sitting on the sidelines patiently waiting to buy despite the fact that we currently have the cash to buy a one million dollar home in the Silicon Valley without a loan. But, we are experienced (and old) enough to spot trends.

Many of us here in the Bay Area are doing well and will continue to do so but, like a game a poker with many bad players there are going to be a lot of losers and for many of us this is all very, very good.

Warmest regards -Lou

[Gandalf]

I got mine for $15,000 and it is now worth $500,000. Took a while but by refinancing along the way I have even made real money outside the real estate business. Best investment I have ever made. However I have never been greedy in the process and never been careless in the use of the equity. Those folks that have gotten into trouble have thought they could get something for nothing and quick. Never have seen that work. Banks and others who have overleveraged get the same sympathy as folks that play margin - NONE.

[Howard Ino]

WOW I am impressed!!!

The LAT REALLY is on "top of their game!"

It's no wonder that Big Media is failing!

[Michael]

So how much money did he lose exactly? $0

[Michael]

Actually his house is worth $1.5 Mil - a GAIN of $400,000 conservatively based on facts rather than speculation. The median 4 bedroom house in DC in 2004 was $400,000 and now it is $700,000.

http://www.trulia.com/real_estate/
Washington-District_Of_Columbia/

[FTC]

This article is pretty lame:

First - yes check with local realtors in Washington, not some guy at MIT about Capitol Hill home prices.

Second - Of course he lost value on his home, as he bought it near the peak. Usually when you are appointed by the President to serve, most people would have to move to Washington (surprise surprise) and he had to move at the peak.

So what happens? The house declines in value. How profound!!!!!!!

Thanks for "enlightening" us. But the joke is on me. I read the article.

[Luce_sociator]

Is that picture of him supposed to be "poor homeless guy sleeping in his limo."

[John]

WHAT'S THE PROBLEM?????????

HE IS STILL AHEAD OF THE GAME!!!!!!!!!!!!!!!!!!!!!

[Liz]

I live in the Capitol Hill neighborhood, and yes, it IS possible to buy new there (if you're independently wealthy, or darn close to it anyway) - there are three "mansions" that were recently constructed on the 600 block of Maryland Ave NE that replaced a dilapidated church buidling. I've watched them spring up from the rubble over the past year.

[ted evans]

He bought it for 839 it has now maybe lost value to 840. I am no economics major, but seemingly this loss is hard to find, perhaps you mean his appreciation is not as great as it may have been.. Your story is---------

[Chicago Resident]

LAT needs a better editor.

[Joey]

Wow ... the LAT at their best.

Comon guys - why don't you go manufacture some REAL news. Isn't that what they call "investigative reporting" - give it a try sometime

[Ronald]

Let me see so he pays less taxes on his home. He has not lost any value for a home he is living in. If anything he is paying less for a house he bought than a year ago.

Now if he sells for a loss this would be very different. Fact is he isn't selling his house and his house is probably paid for. If I was him I would be very happy to pay less taxes.

[devan95]

Note that the left stream media never mentions the good news - that lower property values means a huge tax cut for all property owners!

[Ron]

"What the heck does an MIT economist know about home sales and values in a particular neighborhood in Washington DC?"

Posted by: DC Resident | March 20, 2008 at 08:16 AM

The MIT economist is one of the leading real estate experts in the country. I think he has a pretty good handle on it.

[MyLessThanPrimeBeef]

There is a story about the founding of the Benin kingdom in the Gold Coast region of Africa, concerning seven lice..yes, 7 lice.

The story goes that a prince of the Yoruba people wanted his own kingdom and so he went to the king of Yoruba. Soon, he received from the king's messenger a gift and when he opened it, there were seven lice in there. Puzzled, he asked his advisors. They then explained to the prince that it was a test from the king to see if he could handle taking care of just 7 lice. So he did and was given his own kingdom.

Now, if Bin Lackey can't handle his own little personal economy, how can he handle the economy of the only superpower in the world?

So, for me, this is relevant news.

BTW, I just read that Henry Waxman is going to looking into the Bear Stearns bailout. He must have heard Volker.