Are you having trouble selling your home? Treasury Secretary Timothy Geithner feels your pain- he can’t unload his place either: [Thanks M!]
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.
It sounds like Geithner has a negative flow on this property:
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.
Do you suppose that in a year or two he can sell it to the Treasury as a toxic asset? [It's a nice looking place, by the way. You can see photos of it here.]
SCHADENFREUDE…….
I’m sure the Fed has some program like the USPS. Fed will probably buy it and try to sell it. Who knows.
I think part of the overall problem was that not only did a bunch of subprime and alt-a and prime borrowers bought houses near the tail of the ‘boom’, but so did a lot of ‘financially-savvy’ experts…..hence the bubble-denial for quite some time.
Would anyone care to join me in the Terrible Trio Betting Pool? It would involve some enjoyable speculation on when Bernancke, Geithner, and Summers depart or are booted out of the Obama administration.
My picks:
1. Bernancke: Will announce that he will return to Princeton economics faculty, starting with the winter 2010 semester. Look for the announcement by the end of September 2009.
2. Geithner: By the end of September 2009.
3. Summers: Will announce that he wants to spend more time with family. Look for the announcement just before the start of the 2009 holiday season, say, in October 2009.
And your picks?
Interesting stuff. I know that Larchmont (Westchester County) is an expensive spot and it would be interesting to know how far houses in that price range have fallen. Obviously, it is worth less 1.575 million.
Is anyone familiar with underwriting standards for VA loans? It looks to me like members of our military are being encouraged to knife-catch at relatively high loan levels. Recent example, a slight acquaintance (friend of another acquaintance, someone I see every couple of years) closed in January on a house in an outer suburb of Phoenix. The location’s proximity to Luke AFB makes it a reasonable choice, but its size and price do not. The place is newly built and around 3,500 square feet. I guess that part does not matter too much, but the kind of utility bills required to cool that place to my level of comfort would be enormous (maybe they like it warm). But the 100% loan amount was over $280,000 (checked recorder info at maricopa.gov).
While surely this is well below peak bubble prices for similar exurban houses, it strikes me as way too much to borrow. I do not what this enlisted guy makes, but I know that is not anywhere near the $90K-plus needed to make this a reasonable loan. They have two kids and his wife does not work outside the home.
russ,
it seems a bit outta line to me, but not by much. this is a complete generalization, but the friends/family that i know who are in the military do very well with their money, regardless of what they make….especially when they are deployed. my brother in law, for example, takes just about his entire paychecks and puts them straight into his savings account the 2 times that he’s been in iraq. i have a friend back home that is getting married. he just bought a house….and while he put the very minimum down…..he had plenty in savings to put more down. he’d just rather not put more down than was required (figures if he doesn’t re-up and it takes a while to find a job he’ll have $ to get by for a while). i’m not familiar w/ VA loans though.
“3. Summers: Will announce that he wants to spend more time with family. Look for the announcement just before the start of the 2009 holiday season, say, in October 2009.”
I love when they want to “spend more time with their family.”
Al Franken joked that he wanted to spend less time with his own family when he decided to run.
Good thing Timmy can goose the money supply.
How many times did he object to Fed policy from the minutes? Zero?
Russ may be right, we may be in for Krugman and Orszag in those posts before long.
Sorry, I meant Arizona Slim may be right.
Arizona Slim weighing in with another prediction: Geithner’s inability to sell his house may be because he’s not trying very hard.
And why not? Because he knows that he will moving back in a few months.
Unlike Igor, I won’t be surprised if this happens.
Russ –
I’ve noticed that after a certain level of advancement in politics/corporations, no one gets laid off or fired. They always leave for “personal reasons”. On the rare occasion that a CEO does get fired, he had to have done something crazy like kill 3 major clients.
Hell, one of the CEOs at my last job left to “go back to Australia to spend time with his sick mother”. Only he ended up in Scotsdale, Arizona. Poor guy couldn’t spell, I guess.. we have this sad image of him driving around Arizona looking for his mommy, but can’t find her…
Color me (as usual) the skeptic, but I wonder [i]who[/i] might be renting it (bank employee perhaps?) and what the fringe benefits of paying Geithner’s personal bills might be…