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The housing bubble is fairly indiscriminate to those it affects. Ben Bernanke, Chairman of the Federal Reserve, knows this all to well. His Washington home that he purchased in 2004 close to the nexus of the housing bubble may now be upside down. Upside down is when the value of the home purchase is less than when it was purchased.

I do not think that Bernanke would have been in a position to be in an adjustable loan and facing foreclosure with the income that he has though. It is nice to see that those in powerful positions are living in the same situation that many others face. While I wish no bad fortune on any man, a dose of reality does make key decision maker from living in a bubble.

Which could be good for the country as a whole.

Bernanke 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.

Bernanke’s timing wasn’t the best — values in the area peaked a year later — and he is hardly alone among Americans living in an investment that’s turned cold. His situation shows that the slump that began with distress in the subprime market is now engulfing wealthier neighborhoods, including some in the nation’s capital.

“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. via Bloomberg.com

Related posts:

1. Bernanke to Face Housing Challenges as Incoming Fed Chair
2. Bernanke Says Mortgage Troubles Not Spreading
3. One More Rate Hike and that May Be the End - Bernanke has Spoken
4. Subprime Loss Causes Writedown of 380 Billion Dollars of Assets
5. Bernanke Expects Rebound, But Not In Housing Sector