Federal Deposit Insurance Corp. Chairman Sheila Bair's attempts to sell her own home in Amherst, Mass., suggest she doesn't understand the real estate market -- even as she takes a leading role in saving the banking industry.
The Wall Street Journal recently highlighted Bair's troubles selling her own home, having originally priced it at $795,000 before reducing it $100,000 and eventually removing it from the market. A quick search of property records, and her asking price was over twice the $350,000 she paid in 2002. Dig a little deeper, and you discover Citigroup Inc. (NYSE:C) lent her and her husband $306,500 -- in other words they did not even put 20% down on the purchase.
Bair was easily asking $50,000 more than what the market may have been willing to bear, given the local assessment for tax purposes places the value at $653,100. If she were willing to price it "to move," she'd have still made a hefty profit even after adding in the $89,500 to renovate the 1863 home that happens to be walking distance to downtown and less than a mile from the University of Massachusetts, where Bair was a professor before joining the FDIC in 2006. Maybe Bair was hoping that the home's neighbor, the historic Emily Dickinson Museum, would be enough to draw higher bids. - Matthew Wurtzel
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