WASHINGTON (Reuters) - Few know better than former Treasury Secretary Henry Paulson how the struggling U.S. economy has battered home prices.
As former President George W. Bush’s top economic adviser, Paulson played a lead role battling the U.S. housing downturn and deep financial crisis it sparked.
But last week it got personal.
Paulson sold his three-bedroom home in a tony Washington neighborhood last week for close to a third less than his initial asking price and more than $1 million below what he paid for it more than four years ago.
The villa-style home near the official vice president’s mansion and the National Cathedral sold for $3.25 million on December 21. Paulson put it on the market for $4.6 million in April, later lowering the asking price to $4.15 million, according to real estate industry records. He paid $4.3 million in August 2006, according to government records.
“A jewel-like facade, reminiscent of a Provencal villa, gives way to a remarkable interior with living space on three levels and expansive common areas,” gushed the listing.
Paulson clearly got caught in the wave of price declines that has bedeviled sellers across the nation. But real estate is location specific, and Paulson fared much worse than his neighbors.
The value of Paulson’s house fell 24.4 percent during his ownership. Nationally, home prices are 29.3 percent lower over that period, according to real estate data firm CoreLogic.
But they’re just 5.6 percent lower in his ZIP code, according to the Santa Ana, California based firm.
“It may just be that the treasury secretary paid too much for his house,” said Richard DeKaser, an economist with the Parthenon Group. Prior to October, DeKaser was president of Woodley Park Research, an economic and housing consulting firm based less than half a mile from Paulson’s former house.
The loss is not likely to have much impact on Paulson’s net worth, which was estimated to be as much as $700 million in 2008.
Paulson, who ran Goldman Sachs before coming to Washington in 2006, was not immediately available to comment.
Perhaps his house had a treasury chief curse. His successor at the Treasury Department, Timothy Geithner, was unable to sell his five-bedroom Larchmont, New York home for $1.6 million in 2009 and instead rented it out after taking up his post.
Reporting by Corbett B. Daly; Editing by Neil Stempleman