Even Tim Geithner can't sell his house
Treasury Secretary is renting out his home in a tony New York suburb after the property went unsold for months.
NEW YORK (CNNMoney.com) -- Treasury Secretary Tim Geithner is struggling to unload his million-dollar manse located in a posh New York City suburb. And like so many other Americans, he'll probably lose money on it when he does.
Geithner and his wife Carole put their 5-bedroom Tudor-style home in Larchmont, New York on the market for $1.635 million in February, just days after he was tapped by the Obama administration to help lead the nation out of the worst economic crisis in a century.
The Geithners paid a premium for the house when they bought it in 2004, plunking down $1.601 million after a bidding war. The "exquisitely renovated" home was originally built in 1931, according to a listing for the 0.2 acre property.
"When the house first went on sale it was very evident that he was not going to get what he paid for it," said Scott Stiefvater of Stiefvater Real Estate in Pelham, N.Y. "He was [bound] to lose some money."
It's a familiar story as the housing crisis unfolds across the country. Indeed, after Geithner's house sat unsold for nearly 3 months, the price dropped to $1.575 million. Still there were no takers, so Geithner listed it as a rental for $7,500 a month, and has since found a tenant.
But it's unlikely that even such a steep rent will be enough to cover the mortgage, in addition to the $27,000 in annual property taxes. Of course, no one should feel too badly about watching Geithner take a loss. As Treasury Secretary he's earning $191,300.
Meanwhile, home prices have plummeted 32.2% nationwide since the height of the housing bubble in July 2006 according to Case-Shiller. And millions of other homeowners who bought at the top of the market now find themselves unable to sell or refinance their way out of crushing monthly housing payments.
In April, home sales sank 36% year-over-year in New York's Westchester County, according to the New York State Association of Realtors. But many homeowners are still refusing to lowering their prices, said Miriam Bernstein, an associate broker at RE/MAX Prime Properties in Scarsdale, N.Y.
The median sales price for a single-family home in the area was $570,000 in April, down 10% from $635,000 a year ago, while the median price actually increased 12% in April versus March.
Stiefvater said many Larchmont homeowners, like Geithner, are trying to rent out their homes while they wait for housing prices to bounce back.