BETTER OFF: Real estate value of White House jumps to $284.9 million…

November 2, 2012 7:18 pm  

(Market Watch) –  The value of the White House, for one, is better off that it was four years ago—and its future is also looking bright.

Its current value is $284.9 million, an increase of 1.5% from the $280.8 million it was valued at in October 2008, according to the real-estate website Zillow.

Moreover, if homes in the Washington, D.C., area keep appreciating at the same rate, prices will be up 1.1% a year from now, bringing the value of the White House to $288 million. That’s still lower than the $299.9 million it was valued at in June 2006, at the height of the boom.

The reason that the value of first family’s abode is doing so well has a lot to do with the neighborhood it’s in and the resilience it has shown the past several years.

“The areas that have weathered the housing downturn the best have four industries that are prevalent: health care, government, education and military—and D.C. has all four of these in spades,” said Stan Humphries, chief economist for Zillow. Other towns that have fared above average are college towns and places where there are military bases, he said.

When it came up with a base line value of the White House in 2008, Zillow used 30 of the most expensive home sales in the District of Columbia, creating models that predicted the sale prices based on tax assessments and physical home facts. From there, the models were applied to several historical homes in the area to understand premiums they were selling for simply because of their history.

The maximum historical premium of the homes was 304% and Zillow assumed the historical premium of the White House was at least one-third higher than that maximum.

“It’s almost a nonsensical exercise in itself,” Humphries said. “What we were trying to do is approach it as if it did not have infinite value,” he added, acknowledging that putting a price tag on a place where every president has slept since John Adams is nearly impossible.

Another estimate from real-estate website Movoto found that in October 2012 the value of the White House was between $110 and $115 million, said David Cross, content editor at the site. Its estimate doesn’t account for a historical premium.

“I don’t think it’s going to matter who gets into the White House—the Capitol Hill market is strong, and will probably continue to be that way for some time,” he said.

What will matter depending on who wins the election: the volume of home sales in Washington in the months ahead, Cross said. “Every four years there is a potential for new people coming to Washington, depending on the president that is elected.”

If President Obama is re-elected, there won’t be much turnover. If Mitt Romney becomes president, get ready Washington real-estate agents—business will likely pick up.

Amy Hoak is a MarketWatch reporter based in Chicago.

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