From the Associated Press:
NEW YORK – The real estate market’s troubles are hitting close to home for Treasury Secretary Timothy Geithner.
After reducing the price on his house in a tony New York City suburb to less than he paid for it, Geithner still couldn’t sell and recently rented it out instead, according to real estate agents familiar with the deal.
Geithner put his five-bedroom Tudor near leafy Larchmont on the market for $1.635 million in February, after heading to Washington for his job as the nation’s top economic official.
A few weeks after the asking price was dropped to $1.575 million, the home was rented for $7,500 a month on May 21, said the agents, Scott Stiefvater of Stiefvater Real Estate and Debbie Meiliken of Keller Williams Realty New York.
Although $7,500 might seem like a lot of rent, it probably falls a bit short of the monthly mortgage payments on the Geithners’ two loans totaling $1.25 million, plus $27,000 a year in property taxes.
Records show Geithner and his wife, Carole Sonnenfeld Geithner, paid $1.602 million for the home in 2004.
“There are people who just cannot come down off their asking price because they just cannot afford to lose $200,000 or $300,000, so they’re saying, ‘Let me just put a Band-Aid on it temporarily,'” Stiefvater said. “Losing a couple of thousand versus $5,000 or $6,000 a month, that’s a lot better.”
Here’s the link to Zillow for interior photos of his house:
http://www.zillow.com/blog/geithner-cant-sell-decides-to-rent/2009/06/03/
I feel so sorry for him.why doesn’t he get some welfare money from uncle sam.
This confirms it. Tim “Dr. Strangelove” Geithner, is in way over his head.
Paid too much for his house at the wrong time; can’t sell it. Sounds just like his policies at the Fed and Treasury. The longer Obama keeps Geithner, the deeper we’ll sink. Summers too.l
He will get compensated one way or another. Westchester County where the property is located is among the highest property tax regions under the sun.
I think it is way over priced anywhere near $1.5 million on this property, especially judging from income level.
So the guy that is in charge of billions of our tax dollars can’t sell his house for the price he’s asking.
Kinda prophetic
I know several people all in a similar situation – currently renting our there place for a small monthly loss.
As you said, it avoids the big hit especially if you’ve gotten yourself into a recourse loan. For some it’s also worth it just to keep a good credit rating vs. walking, etc.
The bad news is this guy has a personal need for house prices to go back up to peak levels. Too bad he isn’t a renter who has been priced out the last few years. 🙁
He should have invested in acupuncture and day spas in Vista. 😉
How did a career civil servant afford a 1.6-megabuck house?
I hear those civil servants get lots of kick backs form the likes of goldman and some guy named jamie dimon.
Treasury Secretary Geithner is having bad hair days. He also just went to china and unwittingly discovered his stand up comedy talent when he told a large group of college students that the Chinese country’s investments in US Treasuries were 100% safe. He got a huge break out of belly aching laughter from the crowd.
Gee, do you all you think Geithner is both dumb and corrupt? Do you think the guy might know something about economics? Do you think our civil servants should get paid decent amount of money in order to avoid corruption? Would anyone here want, (or be qualified,) for his job?
The answers to these questions can explain why he can afford this house, and, sit this out until prices turn around. Just like anybody else who has made money and knows how to keep it.
Hey, if your typical California civil servant could afford that house, why couldn’t Timmy? 😉
“Do you think the guy might know something about economics?”
He’ll get to it as soon as he is done with the Turbo Tax user manual.
I say he is as greedy as the next bastUrd, but he lacks the experience to compete with Jamie. Kind of reminds me of his bOss.
Now, do you think Timmy is enjoying it as much as Jamie Dimon did?
Can you imagine if this headline had read “Treasury Secretary Walking Away from $1.25 Million in Mortgages”? Someone in his position can’t really do that because of the precedent it would set. If he can’t turn the whole country around fast enough to save his own house, some banking friends will have to bail him out. Most likely by buying it at an inflated price.
Re: people renting at small monthly losses. I have a picture in my mind of someone trying to plug up a leaky dam with his fingers.
I think he’s neither corrupt nor dumb, but the irony here is remarkable.
“The bad news is this guy has a personal need for house prices to go back up to peak levels. Too bad he isn’t a renter who has been priced out the last few years.”
Very well said sdnerd. I still give him the benefit of the doubt, but this thought sure doesn’t sit well.
I still cannot believe Intuit didn’t sue him after his Turbo Tax made me do it testimony. I guess reading and following directions isn’t on the curriculum at Dartmouth or Camp Becket-in-the-Berkshires-for-boys.
Travertin, people do not read:
http://www.joelonsoftware.com/uibook/chapters/fog0000000062.html
I’m actually amazed that there isn’t a wealthy banker out there willing to make a “bad investment” in order to gain favor with the Treasury Secretary. Seriously amazed.
@BGinRB
Thanks! I’m a software developer and the absolute last thing that’s ever done is adding messages and documenting. Our software is used by electrical engineers and they will read the messages and documentation – usually for no other reason than to nit-pick minutiae.
Of course, even a lowly enginerd such as myself knows what Turbo Tax means by Nanny Tax.
I would find it hard to believe that this high ranking government exec isn’t getting substantial relocation assistance, moving expenses, cash advances on new home purchase or lease, and lots of other perks….all with taxpayer dollars. Naturally, evidence of this would be classified Top Secret for Special Ops Eyes Only.
$7500 rent seems high for a place valued around $1.5MM. I’d say the rent should be more like $5500.
I clicked through to the pictures on zillow. I was surprised – the furnishings are not super high end. It’s a normal house with normal furnishings. The kids rooms look like basic kid furniture. The office looks like a working office.
This follows the anecdotes I’ve been reporting recently on a surge in homeowners renting out their home. I know so many people now doing just that and renting.
the house is frumpy at best. tacky scandinavian and hand me downs. poor baby. and i hate hate the hansel and gretel exterior.
Price/Rent is a lot better in NY than here, I guess.
Here a house that would be listed for $1.6m would rent for about $4000.